Discussion:Changing preparers and lack of prior year information

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Discussion Forum Index --> Business Growth Community --> Changing preparers and lack of prior year information

Pejay900 (talk|edits) said:

10 April 2006

I have several clients that are new this year and had home businesses or rental property. They show depreciation deductions on their schedule C or E but don't know what they are for or don't know the cost basis. Their prior year return does not provide any detail - just a depreciation number. What do you do in this situation?

Albundy (talk|edits) said:

10 April 2006
Have them get Depreciation Schedules from Prior Tax Preparer. Many preparers don't include those forms just for the reason you are seeing. However, in many other cases, the schedules are given to the taxpayers separately due to their size.

Taxea (talk|edits) said:

10 April 2006
Good luck...my standard answer when asked for this information is:

this is work product. I do not charge the client for worksheets I do so, I do not provide the depreciation record or any other detail. Excuse me for not wanting to give away my hours of hard labor but any educated preparer can figure out the information by looking at prior year returns.

It isn't my problem that the client did not keep copies that were provided in past years. Surely the client kept their personal records of purchase on these items.

Natalie (talk|edits) said:

10 April 2006
I recently had a client that did not have details for the prior two years (or so I was told). And they did not want to ask the prior preparer for the information. The tax return for the third prior year had a detailed schedule. I re-created the schedule from the information in the third prior year and added purchases for the years after that to get caught up. It didn't come out the same because the prior preparer had used incorrect lives, but at least we had something to work with. I charged extra for this service.

DZCPA (talk|edits) said:

10 April 2006
Ask old accountant....unless it is TAXEA. Most professionals will gladly fax over a copy. If unable to do so, find out year purchased and back into amount by taking last years depreciation.

Nola999 (talk|edits) said:

10 April 2006
I volunteer to call the prior accountant because often the new client is uncomfortable talking to the guy they dumped. It's a great opportunity to get a heads up too...like "Yes, I'll send you the depreciation schedule. Good luck with the deadbeat, I'm glad to see him go." gives you some warning to ask for your fee in advance or maybe not take him at all.

I don't ever remember having the prior accountant refuse....once they wanted to charge me for it because the client hadn't paid his bill. If the old accountant is mad about losing out, you know you are probably getting a good client.

Whether you're obligated to provide the new accountant with your workpapers or not, it's just common curtesy between professionals. Why make things harder for one of us?

LJACPA (talk|edits) said:

10 April 2006
I have to just guess that TAXEA is tired and having a bad Monday because his/her comments are downright unprofessional. I might charge for time to gather and provide information, but only rarely and only if it is a duplication of what I had already provided the info to the former client. I have never had anyone refuse to provide the info to me for their former client. To say that "any educated preparer can figure out the information by looking at prior year returns" is so, so wrong. I am a CPA with 19 years experience and cannot create something out of nothing. So you've got the prior year return, with or without 4562, there is no way to "figure out". It is Monday morning, the 10th of April and I personally was insulted by TAXEA's comments. You are wrong.

Klesher (talk|edits) said:

10 April 2006
Yes Taxea is wrong - I am willing to give him/her the benefit of it being April 10! Hopefully, this is not what he/she really does. I have never had any problems with getting prior info either.

Chautauqua (talk|edits) said:

10 April 2006
I consider a depreciation schedule to be an integral part of the tax return, and the filed copy and the taxpayer's copy should contain both a Federal and a state depreciation schedule. If a preparer refuses to provide a copy to the taxpayer, I would report the preparer to the licensing authority. It is impossible to reconstruct if taxpayer does not keep a copy of every year, and even then it is not possible to identify which assets took Sec 179, whether the depreciation method changed during the life of the asset, etc. A preparer with any ethical spine will provide depreciation schedules without charge, without delay, and without bitching about it.

JR1 (talk|edits) said:

10 April 2006
The only time I hold out is if they owe me money, and the only times I've found another pro to hold out is when they're owed money. . .Now, if I have to do a bunch of work there may be a charge involved. But I've had a few clients return after dropping. You never know. Being nice doesn't cost much.

Chautauqua (talk|edits) said:

11 April 2006
Why not charge the client for work done on their account? I never work for free unless it is a no-charge client or a hardship case. In CA, if you withhold client documents for any reason, you can be hauled in front of a tribunal.

Shelli10 (talk|edits) said:

27 March 2013

HR Block will not give up the detailed schedule from last year. Now that we are all 'registered' with PTINs is there any recourse that can happen with a preparer refuses to give up such vital schedules?

Trillium (talk|edits) said:

27 March 2013
Hi, Shelli - Here is a currently active (well, maybe a week old) discussion about this very topic: Discussion:Mystery Depreciation.

Unfortunately, the search engine on TaxAlmanac puts the discussions started longest ago at the top of the search results. It's not a best-match algorithm like everywhere else. So you've bumped the oldest of the discussions... to get the most recent, it's generally best to read the results from the bottom, up.

That's not to say that the whole discussion won't just start up all over again here - people seem quite willing to post about what they do, and the concept in general, any time this comes up again!

Taxmesoftly (talk|edits) said:

17 April 2013
We don't attach them, but we will provide upon request. We don't submit any tax return unless they paid.

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