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?