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Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 1704
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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April of 2011 my bookkeeper was arrested for fraud and embezzlement.

Resolved Question:

April of 2011 my bookkeeper was arrested for fraud and embezzlement. She made fraudulent entries into our accounting system to cover he tracks. After many months I determined I needed to file an amended tax return for 2009 and 2010 to try to correct the mess that my books were in. Before filing the amended return I received an audit notice from the IRS. I quickly found they had no interest in providing any leniency for having had a criminal bookkeeper mess up my books. I retained a CPA firm to help me, but as of today I am still bogged down with no resolution, and the audit is now for 2009-2012! I've paid the CPA firm over $30,000 and I sense they are doing a very poor job.

The bookkeeper stole all the files and the main computer for 2009-2010 in an attempt to cover her tracks. The IRS demanded receipts for all transactions for those years, and my explanation that they had been stolen fell on deaf ears. After accepting the CPA's negotiated settlement to throw out $50,000 in expenses for each year, we went to work on 2011. I spent a great deal of time organizing and submitted our docs to the CPA with the understanding they would clean it all up and correct the errors we'd encountered doing 2009 and 2010 before submitting it to the IRS in perfect condition. Nope. They called back less than a week later and told me the IRS agent was pissed off to find the 2011 filing had much of the same chaos and errors as 2009 and 2010! I was livid. When I met with the CPA and her boss (partner of the CPA firm), he said I couldn't expect them to go over every transaction and that I was being unreasonable. They apparently did but a cursory review before turning in another mess to the IRS. I thought I was paying them to ensure that return wasn't filed until it was clean... no?

I recognize this gets very complicated, but at this juncture I need to know how to determine whether my CPA firm is incompetent, and whether it's best to fire them and incur large costs to bring another CPA up to speed on my case, or stick with them an not "change horses in mid-stream." It's difficult to know whether they're doing a good job.

How can I know whether my CPA firm is doing a good job and not just bleeding me on this? Should I sue them for filing my 2011 return so badly after I had paid them tens of thousands of dollars to help resolve my IRS problems and they just made them worse?

In despair,
Roger
Submitted: 9 months ago.
Category: Tax
Expert:  Anne replied 9 months ago.

Anne :

Hi

Anne :

This is a very good question, and I understand your concerns.

Anne :

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.

Anne :

First, IRS has some information designed to help you choose your tax preparer

Anne :

Here is the link to their site

Anne :

http://www.irs.gov/uac/Ten-Tips-to-Help-You-Choose-a-Tax-Preparer

Anne :

Personally, I think #1 and #2 are the most relevant to your situation

Anne :

I've been preparing taxes for 27 years, and there are certain things I ALWAYS tell people that ask me this question

Anne :

First, you should absolutely check on your CPA or Enrolled Agents history

Anne :

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

Anne :

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 )

Anne :

Ask them some general questions that relate to your situation.

Anne :

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)

Anne :

I'd steer away from any company that promises you up front that they can settle your tax liability for pennies on the dollar

Anne :

What you DO want to hear is that this person is knowledgeable about IRS 's procedures and that they have a plan in mind

Anne :

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

Anne :

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

Anne :

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?

Anne :

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

Anne :

 


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.




Customer:

Thank you, Anne.

Customer:

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 ??

Customer:

What is the difference in having an Enrolled Agent represent me versus a CPA or Accounting firm? Which is preferable?

Customer:

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?

Anne :

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.

Anne :

You can, of course, always sue them, but that costs for an attorney, and that has to be your decision

Anne :

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.

Anne :

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

Anne :

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

Anne :

There is a tax pro business review where you can report your CPA

Anne :

Here's the link:

Anne :

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

Anne :

I truly hope this helps

Customer:

Yes it does, Anne. Thank you.

Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 1704
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Anne and 4 other Tax Specialists are ready to help you
Expert:  Anne replied 9 months ago.
Thank you for very much for the positive rating and you generous bonus!

Please feel free to ask for me by name by putting "for Anne" in your question line if I can help you in the future.

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