Discussion:Writing checks on behalf of client
From TaxAlmanac
Discussion Forum Index --> Business Growth Community --> Writing checks on behalf of client
| 24 June 2009 | |
| I have a potential bookkeeping client who wants me to be a signer on his bank account and pay all of his bills each month. He will tell me what to pay and I will cut and mail checks.
I'm not sure if I am comfortable being a signer on his account, I would much rather just prepare the checks and have him sign them each month. Does anyone have any thoughts or experiences in this area? Thanks Pete | |
| 24 June 2009 | |
| I know that anyone with "control" over a Company's finances can be liable for a penalty if witheld payroll taxes are not paid to the IRS.
The question is does having signature authority on a bank account constitute control if transactions are only initiated with the business owner's permission and this is documented in the engagement letter? | |
| 24 June 2009 | |
| So no check signing for me... not worth the risk. Thanks Kevin, a great learning point. | |
Brock And Associates (talk|edits) said: | 24 June 2009 |
| No thanks, I will pass on that one.
| |
Sjpaccounting (talk|edits) said: | 24 June 2009 |
| I have had clients want me to sign their checks. I say, no thanks! I want you to see all the is going in and out of your account without any worries!
Sasha | |
Oldeastsidr (talk|edits) said: | 25 June 2009 |
| To add to Kevin's comment, sales taxes (if the client has the liability) are another factor. The states (especially New York) are very aggressive in saying that if you can write checks and the client does not pay (or underpays) sales taxes, you will be a "responsible person" and assessed for any client underpayments. Then you have to go to appeals, etc and prove why you should not be held liable for those taxes. Even if you are not, it is a heck of a headache (and expensive) to prove it. | |
