Discussion:Client under Audit - what is my play?
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Discussion Forum Index --> Tax Questions --> Client under Audit - what is my play?
Yt1300inHtown (talk|edits) said: | 30 October 2009 |
| Background - client came from another firm which was working with him on his 2003 IRS audit. A lot of time and effort was put in on it. As far as I can gather, the agent has made serious adjustments based on his findings of unreported income. Client had a falling out with CPA although I am not sure he is telling me exactly why.
From what he has sent me so far (which isn't much), all I see is that back in April of 2009 he was sent the forms to fill out regarding payment arrangements. (Form 433?) This would indicate to me that the deal was almost done. But he didn't fill out the forms of course...he sent me the blanks. It sounds like the agent has made his findings and there is no real arguement to be made. I have had no real contact with the agent because I have had information or background to even discuss anything with him. So now, agent has issued levy on taxpayers accounts and he is flipping out. What is my play? Do I contact the agent and try and buy some time? Based on what? Client is not making this easy on me. I know the client's records are terrible and I see levies issued on other years in the limited amount of documents he sent me. So what do I say to the agent??? I have litte experience with audit proceedings so any help would be solid. TIA YT | |
| 30 October 2009 | |
| If you've already got a feeling that your client is withholding information from you, and you already know that he's had a "disagreement" with a prior accountant, I'd fear that he's just learning what information to withhold from you. He told the prior accountant something, the accountant didn't like it, so he's moved on to you, and now you won't know that information because he knows accountants don't like it.
I don't have any real advice to give you re: dealing with the agent, just advice re: the client. Trust your gut. | |
Yt1300inHtown (talk|edits) said: | 30 October 2009 |
| My gut is that he just doesn't want to pay and has unrealistic expectations on what we can do.
Problem is he is the father of another good client so I can't just tell him to take a hike exactly. | |
| 30 October 2009 | |
| sounds like this is past the audit and into the collections phase
are you sure you are dealing with an 'agent' and not an RO?
If it's not something you know much about, you (and certainly the client) might be better off referring the client to an expert. | |
| 30 October 2009 | |
| It is OK to admit when an engagement is out of your field of expertise.
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| 30 October 2009 | |
| It sounds to me as though the audit is long since over and has become a final assessment. It's not "almost done" -- it's done. You'll be working with IRS collections, not audit. If it's a final assessment, there is nothing you can do about it now other than to have him pay it, then determine (assuming he will pay you for the work) how much he REALLY owed and file a claim for refund for any overassessment. Your first step would be finding out exactly what the status of this matter is with the IRS, but my guess is that it's a final assessment.
If it's final and he doesn't have the means to pay it, you can negotiate an installment agreement (that's where the other accountant was headed, it appears, since he has the forms to fill out). Or if he'll never have the means to pay it, he may be able to do an offer in compromise and settle the liability for less. Trust me, both you and he will be better off if you refer him to someone who is experienced in dealing with IRS collections. You don't have to tell him you don't want to represent him; tell him you're not competent to handle this kind of matter and refer him to someone (somebody like Irsfixer) who can. You'll be doing him (and yourself) a favor. | |
Yt1300inHtown (talk|edits) said: | 30 October 2009 |
| Agreed on all counts.
The firm he was at was the firm I used to work for. They are pretty sharp cats so I think they would have done a good job. They have been around since the late 60's. I've seen the accounting for the client and its a disaster. I've also seen the agents reconciliation of bank deposits to 1099s and its not pretty. What else would I do for it? Thanks for the feedback guys. Y'all read this one pretty much spot on. YT | |
| 30 October 2009 | |
| By the way YT - my experience with turning down such work when it's for relatives of very good clients is that when the good clients hear, they just roll their eyes & say "I knew it - as usual Dad screwed up so much that he can't even keep a good accountant", and they're grateful you don't fire them as well! I think you do have a shot that your good client will react that was. | |
Yt1300inHtown (talk|edits) said: | 30 October 2009 |
| I just got more info. The levy is for 2006, NOT 2003. The contact person I spoke with was from the APPEALS office regarding 2003-2005. Not sure what I would appeal since I have had no info. As the others have correctly noted above, the levy notic is signed by a collections manager so we're in a different stage now.
He also sent me his LLC notice of forfeiture from the state dated 1-30-09. In other words I am the new rug to sweep this mess under. | |
Death&Taxes (talk|edits) said: | 30 October 2009 |
| Could he have asked for a collection hearing on the 2003-05 years? [someone correct my terminology, please.] | |
| 30 October 2009 | |
| I'm not sure how old Dad is in this case. But I've had a few seniors that I would classify at the early stages of senility. Just can't find records, dont remember mailing forms... If so, I would talk to the son about his Dad's lack of records, remembering things. Maybe Dad needs to medically evaluated and may need son to start sorting things out.
If Dad is a sharp cookie that wants to play games with the IRS, get a retainer, $2000, up front and charge by the hour. Or as KatieJ suggested forward to someone with far more experience (with aggravation). There are some clients that will never be happy, grateful or appreciative with what you do, because what they want is not achievable. Better to get out early. | |
| 30 October 2009 | |
| This IS the year for senior clients tax problems. I have had no less than six senior couples who messed up/forgot/didn't make/did make but told me they didn't/ didn't make but told me they did - on their estimated taxes.
This takes more time for me to research and figure out what is going on than to do their tax returns in the first place. I have always felt sorry for the clients in this stage of frustration/forgetfullness/husband always handled it now it's up to me/whatever, so I haven't charged them for this time. Do you? | |
| 30 October 2009 | |
| No, I just grim and bear. I recommend they get a son or daughter to get involved. Get a durable POA, make sure wills are up to date. It's very sad when they have no one. Or even sadder, when they say "He's too busy..."
Senility is such a slow process that the children don't realize how bad its gotten. I think this one of the reasons you read about seniors getting scammed. They begin to trust like a child. | |
| 31 October 2009 | |
| Your client is in collections and your options are as follows:
1) Stall to buy time There you have it. If you get to #8.. be careful. Tax court judges hate CDP appeals and 'will' sanction you for making frivolous arguments. Good luck! | |
| 1 November 2009 | |
| 0) Get client to cooperate, if he can.
YT, my sympathy. You're swimming upstream with a blind fold on. | |
| 1 November 2009 | |
| YT,
I am in Kingwood. I can refer you to 2 LOCAL guys who can help with collection issues. VERY experienced, and will reliably stay hands-off re:stealing clients afterwards. I can personally vouch for them both. LFlet55@aol.com | |
