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Discussion:New preparer asks for backup copy of computer data file of prior year tax return

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Discussion Forum Index --> Tax Questions --> New preparer asks for backup copy of computer data file of prior year tax return

PVVCPA (talk|edits) said:

February 23, 2007
Have you ever had a former client's new preparer ask you for a backup copy of your clients tax data file? What is your policy on this?

A few years ago, I asked a former preparer for the backup file for a new Corporate client. I knew the former preparer through a common associate, so I felt comfortable asking him this. He said he would give it to me if I paid him $250. There were over 100 depreciation items. So, from a value stand-point it made sense. But being the principled, hard-headed person that I am, I said no thanks. I have never asked anyone ever again.

Kevinh5 (talk|edits) said:

23 February 2007
I don't think we can give anything without the client's (former client's) permission any more, so I don't ask. I have the client ask. If the prior accountant charges $250, then the client can pay or stay with the old accountant.

On the flip-side, I always give my clients a copy of the depreciation schedule. If they want to leave me and go to you next year, the last thing I have time for is to answer a call from you (nothing personal, but I would rather answer nameless faceless anybodies on this board).

Why doesn't everyone else do the same? The client has already paid for the calculation, there is nothing secret or sacred about it.

PVVCPA (talk|edits) said:

February 23, 2007
Kevinh5, I was referring to the computer file, not the printed copy. I already had the printed copy and all the necessary schedules. I just was being lazy and did not feel like inputting 100+ depreciation items.

And I agree, I give the Depr Schedules and all the Carryforward information to my clients in their copy. I, too, wish every preparer would do this. Besides, it makes the client package all that much heavier.

Ex-IRS (talk|edits) said:

23 February 2007
I ask the taxpayer to provide any copies of tax returns, worksheets, etc. If their prior tax return preparer did not provide it to them, then for privacy reasons I ask the client to ask them for it.

I agree with Kevinh5, the client has paid me to prepare their tax return and the depreciation worksheet is part of that so I would not charge anyone extra to give them a copy of that.

PVVCPA, I'm with you, I wouldn't have paid the prior preparer either.

Deback (talk|edits) said:

February 23, 2007
And, frankly, it's just simply the right thing to do. I can't tell you how many times I've gotten new clients that didn't have their depreciation schedules from the prior year(s).

PVVCPA (talk|edits) said:

February 23, 2007
I'm talking about the computer data file. Would you send the new preparer the computer data file?

Deback (talk|edits) said:

February 23, 2007
Probably not, but I would send the depreciation schedules to the client. In my case, I shouldn't have to do that, because I've always given clients copies of their deprec schedules.

Kevinh5 (talk|edits) said:

23 February 2007

Rgtaxservice (talk|edits) said:

23 February 2007
You should forward the requested info (definately not the computer file) to the client. They can pass on to the new preparer. Unless of course, the request is in writing. I've had clients fax me a request to forward info to someone else and I keep the request on file.

Jokadah (talk|edits) said:

23 February 2007
I have never asked for a backup copy of a new clients computer data and I would not give a computer back up copy. All copies are provided to client and if they lose them then I would charge for a copy of their return. I started charging for copies because several clients would contact me for copies throughout the year or ask me to fax to loan officers. Once I started charging, I get very few requests for copies.

Will (talk|edits) said:

23 February 2007
If client asked me to send prior year lacerte file to new accountant I would. It is quicker than just sending the depreciation in most cases. I have had two separate clients bring me 2005 Lacerte files from their prior accountants this month, was pretty nice.

DZCPA (talk|edits) said:

23 February 2007
I would not send the Lacerte data files. The new accountant should be happy they got a new client. Save time by combining the assets from prior return to the new input. Most of the assets are probably written off or section 179.

TaxManager (talk|edits) said:

23 February 2007
I work for a large firm in NY. It is not uncommon for us to receive the data file from the former accountant. Usually this is done because of large depreciation schedules and carryforwards attached to the return. In several instances the former accountant used Go Systems and our office uses Prosystems. We have the file converted and rolled over to the current year. I believe the client ends up paying a fee to the previous accountant for their time.

It is considered a professional courtesy to do this. There are times when the old accountant loses a client to my firm and then there are times we will lose clients to them.

Taxea (talk|edits) said:

24 February 2007
I consider any worksheets work product...none of this is ever given to the client, nor will I release anything I have created that is not a part of the filed return to either the client or new preparer.

My clients get what the taxing agencies more, no less.

The only reason why a new preparer would want the info is so they don't have to do the work. I did it when I took on the client...therefore...I don't give it away.

I also pdf the "filing copy" of the return. This is what the client gets, for a fee, if they need copies of the return. taxea

Michaelstar (talk|edits) said:

24 February 2007
Lots of posts to read..... No, I would not provide a client that has gone or the new accountant with the computer files. No way - no how - have fun from the hard copies already provided to the client. Tough business to be in but business is business - there are no free lunches.

Lizzit (talk|edits) said:

24 February 2007
I do this for everyone who requests it. I myself request it occasionally in particularly complicated cases like the one your client has.

For anyone who has a client leave them, in today's litigious society you're gosh darn lucky you aren't being sued (albeit undeservedly in most cases). Why not leave on good terms (giving everything they request)? That way, if the client ends up not being happy with their new accountant, they'll come back sheepishly with their tail between their legs to you. If you are recalcitrant and draw a line in the sand, they'll never come back.

Under the Data Protection Act in the UK, all the data we have belongs to our clients. If for any reason our clients want to have access to their data, we must provide immediate access. They have the right to peruse everything in their files, though we can charge a nominal transaction fee to take away a copy (I don't do that). That includes computer files and workpapers. So, we don't get to leave helpful notes in the file saying "this bugger's a PIA". I've had companies here blatantly ignore the Data Protection Act and not give copies of tax returns, files, or even client's original documents. I don't know how they get away with it.

Corptaxhelp (talk|edits) said:

February 24, 2007
I don't have a problem handing over an electronic copy of a client's data. As with anything else, there is a fee. The office staff handles the request at $75 an hour. This is usually a half-hour task. Either the requesting CPA can pay and then pass the fee on to his new client (which is what usually happens) or the client can pay the fee to me directly. In either case, I want something in writing (fax or email is fine) from the client releasing the information.

Some see this as giving away work product for less than the cost to recreate the data. I see it as getting a bonus $37.50 from someone I'm never going to see again. The new CPA usually appreciates the service, doesn't mind the fee (he ain't paying it anyway) and it is an opportunity to spread good will among peers.

Of course, this assumes the client doesn't owe me money. If money is owed, all accounts must be cleared before I hand over the electrons.

Ardecker (talk|edits) said:

14 April 2008
On another topic, what to do about a former tax preparer that will not release copy of returns they prepared? We had the client request them 3 or 4 weeks ago , and they said "we do not have time to get copies for the client, we will get them after 4/15, and we already gave them a copy when they were prepared." Our firm has extended the clients return, but we are leary whether we will ever get copies. Client cannot find their copies. Very frustrating because we always respond quickly with such requests - it only takes 5 minutes to copy and scan or fax 20 - 40 pages.

PaperworkCPA (talk|edits) said:

14 April 2008
About not getting tax return copies from prior preparers.

Your best bet may be to try the transcript delivery service from e-services.

You need a form 2848-POA and either AGI or TI(I forget which one) for the year in question. If you don't have the AGI/TI, I was told by the efile help desk that the taxpayer could call and get the amount.

Joanmcq (talk|edits) said:

14 April 2008
Hey, I wouldn't have time to find, copy and fax a return for a former client this weekend. I'm a one person office, and I'm not gonna stop working because my ex client lost their data. You can get a transcript and then get a hard copy after the 15th.

Death&Taxes (talk|edits) said:

14 April 2008
Three weeks ago? How much time can it take to make a pdf?

Southparkcpa (talk|edits) said:

14 April 2008
My view on this is case by case. I have given the "proseries" tax data file several times when the switch is friendly etc... on other occasions (very rare) , I have an excel Fixed asset file but print it to PDF because I will do nothing to help the situation. Most cases I give them whatever they want , it makes our collective lives easier. As long as the client is OK with it.

Lukepccpa (talk|edits) said:

27 April 2008
I agree with Southparkcpa. I also do it on a case by case basis (always with the client's permission), and it is very rare that I say no. It's a good way to build goodwill with other firms in hopes they will return the favor when you need it.

There are only two situations where I say no or charge. One is when I provide a firm with the requested info for free, then they bill me when I request info for a client I pick up from them. The other is when a client still owes me money.

Jstax08 (talk|edits) said:

28 April 2008
Agree with Southparkcpa and Lucepccpa...usually a professional courtesy to send data file if availabe. What goes around comes around....sometimes.

BEGooding (talk|edits) said:

April 28, 2008
I would give the computer file if I was confident everything was correct including things like S Corp basis calculations, foreign tax credit carryforwards, AMT depreciation carryforwards etc. etc. And of course, charge the client $50-$75 for the service.

However, I would want to first make sure the new preparer did not improperly solicit my client away from me.

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