Discussion:Returns from client info only
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Kvaccounting (talk|edits) said: | 20 April 2006 |
| T/P is a truck driver/owner op. He showed up with his info all tallied up. I have no way to verify numbers. I did file for an extension. I know I could just put them on the forms for him, but should I get some type of release form signed saying that client gave me the totals? | |
| 20 April 2006 | |
| I prefer to have my clients bring in just totals (except for payroll items) for thier business. No different than brining in a copy of their Quickbooks. I will check to make sure the expenses are "reasonable" but that's about it.
An engagement letter is always a good idea. It should state that "We prepare the tax return based on the information that you(the client) provide." and that "you(client) are responsible for documenting the information that you provide us." Or something similar to that anyhow. | |
Chautauqua (talk|edits) said: | 20 April 2006 |
| Tstolley is correct. You are not an auditor, and unless something is out of line or smells fishy, you should not pursue it. Would you rather the client brought in a shopping bag full of receipts and asked you to sort and tally each group? You should always get a signed engagement letter on new clients, and after that I still include letters with the organizer, but don't require that they sign and return. | |
| 20 April 2006 | |
| I also prefer NOT to see receipts. I do some tax returns for companies where the backup documents would fill up half my office. I do question things that appear unreasonable but I certainly do not audit the tax return. I will frequently ask for certain invoices but if a client is lugging in bags and boxes of items I will usually send him away. | |
| 20 April 2006 | |
| Yes there is. (or how i get to spend my summer) 1: Accountant had POA for the last three years of decedant's life. Value at beginning $1.7 mil; value at death $350,000. (Why is it that they always want to put the accountants in jail and they just make the lawyers give the money back?) 2: Decedant died in Argentina. Had residences in New York (containing one girlfriend), Nevada and possibly Morocco. Six known file cabinets and two safes. | |
| 21 April 2006 | |
| So who was upset? Tax authorities or wannabe heirs? Is it a crime to be profligate? Of course, it was the accountant's fault, whatever the problem. | |
| 25 April 2006 | |
| That is why I get an engagement letter signed, which in effect makes them state they are fully responsible for the figures they've provided me. | |
| 26 April 2006 | |
| We are doing taxes on the basis of information provided to us. I always tell my clients that whatever figures they are giving me should have a backup/proof. Because in case of audit I will not help them if they gave me wrong information. I agree with Chautauqua that we are not auditors. The restponsibility for correctness of information rest on the TP. We are only organizing the same information on the tax return correctly. | |
| 26 April 2006 | |
| Requirements of Circular 230, as well as the AICPA statements of professional responsibility, and (as I recall) the ABA's ethical guidelines, provide that when preparing a tax return, that it should be true, correct and complete (the words of the jurat on most tax returns).
One need not AUDIT the clients data. However, if you are aware of something that appears, incorrect, incomplete or untrue, you need to resolve the matter. I had a client who omitted a 5000$ commission as it did not appear on any 1099. I happen to also have as a different client the party who paid client that 5000. Paying party included that 5000 as a expense in their tax data so I became aware of it. Client resisted reporting the 5000, as (of course) it was not reported on 1099s anywhere.. so doesn't that mean it need not be reported?. Obviously I insisted. Well now the issue is whether I need to require higher substantiation from that client?
But again, the issue is: What substanciation is required after you are on notice the client is not entirely forthcoming? And what to do about such clients in general? Lets be honest, there are LOTS of such clients around. | |
| 27 April 2006 | |
| If you become aware of an issue, that is another matter. Original question above just asked if we could take original figures client provided. | |
| 29 April 2006 | |
| Sounds like a great client. Have him refer all his friends to you. Note: Try not extending clients that have their info organized. They usually submit info early and should be completed promptly if you want to keep them happy. | |
