Discussion:Another Question of Ethics
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Death&Taxes (talk|edits) said: | 30 September 2009 |
| Twice in the last month, I have taken on a new client recommended by family members. Both were from New York City and had prior returns done by professionals either in the city or in nearby Long Island. In both cases, the clients were basically employees making 200-300K, plus either stock options or K-1s from family partnerships. In the case of the latter, the K-1s involved filing in CT also.
There was little else complex about the returns, but I was struck with one thing when reviewing 2006 & 2007. Neither professional listed their fee on Schedule A. Had they done so, the 2% rules would have eliminated any deduction, but this seems so chintzy especially when the fees ranged from $1025 to $1475. Do you list your fee even if your client can't benefit? Am I being hyper-critical? | |
| 30 September 2009 | |
| I usually don't when it doesn't benefit them, but then I have to answer questions when the client asks why I didn't include my fee on Schedule A. | |
| 30 September 2009 | |
| I usually list these type items just so the client will not think they were overlooked. I don't see this as an ethical question though. | |
| 30 September 2009 | |
| Not sure why this might be a question of ethics.
I agree with WayneCPA. The prior tax pro didn't waste his time with listing them because there was no tax benefit, not because he wanted the next tax pro to not know what he charged. | |
| 30 September 2009 | |
| I sometimes don't enter it when it doesn't benefit the client, just because it's one more number for me to screw up & make a mistake on. | |
| 30 September 2009 | |
| Some of the wording might lead one to think you're saying you should list the charges for doing the 2008 return on the 2008 Sch A. It's really 2007 charges on the 2008 Sch A. My prep fees this year wouldn't show up until next year's Sch A. | |
Death&Taxes (talk|edits) said: | 30 September 2009 |
| All of you are right, it isn't ethics.
Both clients listed the fee in their information, so it was not a case of need to know for my purposes. In the case of the client with the family partnerships, I based my fee on that of her sister, who has a similar return. In the other case, I gave an approximate fee on the phone before the material came. And, of course, this was the 2007 fee deductible in 2008. I've gotten the same reaction as Wayne several times, or calls asking if I deducted my fee. Takes to long to explain the 2% rule. And my wife, who processes the returns, will sometimes ask 'where is your fee from last year?' as she puts the copies together. She brings me the Schedule A and points to the blank line. | |
| 30 September 2009 | |
| The 1040 is filed on a cash basis. The 2008 prep fee s/b on the 2009 1040. | |
Heritage120 (talk|edits) said: | 1 October 2009 |
| I always list the preparation fee. Many of the fees may be split and broken into the part for personal and the part attributed to the Schedule C. I charge a flat fee for the Sch C so it is easy to pull that figure out. It just seems lazy to not at least put the figures there. The client may think you just didn't catch the fee even though it was phased out by the 2% rule. It's the same for medical. I'll always list it especially if the client took the time to list the deductions. | |
| 1 October 2009 | |
| I always list the fee. I don't want to get in the habit of trying to out think the computer as to whether there is a tax benefit or not. Many times you may think your done with a return and magic here comes a new K-1.It also conveys to the client a sense of thoroughness and professionalism. Also recording the fee may come in handy if you have to file an amended return where there may now be a tax benefit due to the portion of the return you are changing.(Example NOL carryback ). | |
Michaelstar (talk|edits) said: | 1 October 2009 |
| I always list the fee - even if they do not itemize for information purposes. It also carries over in the tax org to the following year as to what was charged/paid. | |
