Have a Tax Question? Ask a Tax Expert
This is a very good question, and I understand your concerns.
Since I don't know the CPA, my goal here is to give you the information you need to make the decision that is right for you.
First, IRS has some information designed to help you choose your tax preparer
Here is the link to their site
Personally, I think #1 and #2 are the most relevant to your situation
I've been preparing taxes for 27 years, and there are certain things I ALWAYS tell people that ask me this question
First, you should absolutely check on your CPA or Enrolled Agents history
One way is to check with BBB. If the CPA you're using is working for a large company, it may be difficult to find a history on him/her individually , but checking on the company will be a place to start.........and I do mean start, because I know many preparers working for large tax companies that have some complaints against the company, but the individual preparer is wonderful
I always tell people to call different tax places, (and in your case you will need either a CPA or and Enrolled Agent, so those are the people you want to talk to )
Ask them some general questions that relate to your situation.
Ex: ask if they have ever worked on an audit? Give enough information (such as this deals with multiple years and that you do not have any of the original receipts) and see/listen to their reaction, because this is the type of problem that will require alot of time, and could literally take up to 18 months, since they are going to have to call the IRS at times for you to see what types of documentation they will accept (cc receipts....copies of canceled checks from your bank, etc)
I'd steer away from any company that promises you up front that they can settle your tax liability for pennies on the dollar
What you DO want to hear is that this person is knowledgeable about IRS 's procedures and that they have a plan in mind
Forgive me .....this line should be between that last 2 that posted (since you can't have a plan if you haven't seen the paperwork and what has already been done) but its important that whoever you choose does not promise you anything without seeing all of the paperwork first
Finally, I always tell people to make the phone calls in person..........its important that you find an Enrolled Agent or CPA that you feel you can work with, that you can create that repore that you're going to need over time
You also need to find out how they charge...........hourly? if so, how much? Is there a minimum charge? Will you be able to contact this person year around?
If you do decide to change from your current CPA, I would certainly find out what their guarantee is (if any) and I would be pursing a refund of that $30,000
I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me.
Thank you, Anne.
If I may get clarification on a couple items... how do I go about pursuing a refund from my current CPA firm if I decide to fire them? Sue them? Or is there a regulatory agency that I might file a complaint? Or ??
What is the difference in having an Enrolled Agent represent me versus a CPA or Accounting firm? Which is preferable?
For my 2011 return I was first given a verbal estimate of $5,000. When we blew through that number and I complained, they sent me a contract to sign with an estimate of $5,000-$10,000. As we approach and blow through that second estimate, do I have legal recourse to stop paying beyond their estimate or get a refund or demand they finish the job within the estimated maximum?
On the bottom of the link I sent you (http://www.irs.gov/uac/Ten-Tips-to-Help-You-Choose-a-Tax-Preparer) there is a link re: reporting abusive tax pros to the IRS. However, the IRS does not define what they mean by "abuse". I would certainly try to work the preparer/company to see if you could come to some sort of agreement. I suspect the threat of reporting his behavior as abusive may tip the scales in your favor.. Be sure to check your contract with them to see what terms and conditions you signed for, and more importantly, what they claimed they could/would do for you.
You can, of course, always sue them, but that costs for an attorney, and that has to be your decision
Enrolled Agents, such as myself, have taken tests in all categories of tax law through the IRS. We must then maintain our status by completing at least 24 Continuing Education Units per year, and we can represent you in front of the IRS. You don't even need to be there.
The difference between us and CPA's (who can also represent you in front of the IRS) is that our knowledge is confined to tax law only. Tax law is our speciality
There are many very good CPA's that have also chosen to specialize in taxes, but there are also those CPA's that specialize in bookkeeping, payroll, etc
There is a tax pro business review where you can report your CPA
Here's the link:
Be sure to read the contract you signed, or better yet, I would run it by an attorney......you have now paid $30,000 (which was money that could have been paid to the IRS ) and I don't hear anything in your letter stating what, if anything, your CPA has accomplished for you despite the new estimate
I truly hope this helps
Yes it does, Anne. Thank you.