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Discussion:Problem with tax client

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Ejhcpa (talk|edits) said:

25 May 2012
Just wanted some advice on how to handle the following: I had a new client call me in 2008-- she's 79, widow, wealthy and a pain. I have done her returns since 2008 and have charged her $250 every year. She contacts me in Nov, 2011 and tells me I didn't include some income from a 1099 for tax year 2009. I met with her, looked through her info provided...and she didn't give me the 1099. I send a letter to IRS and amend return and had to call them twice to fix the issue (or so I thought). This year in Mar, she asked me to do her 2011 return. I said yes, but your bill will be a little higher as I spent some hours on 2009, as well. I did her 2011, met with her, gave her a bill for $425...she ripped me saying I made the mistake (again...she never gave me the 1099 for that year), and shouldn't have to pay for my mistake. SO....I dropped back to $325, then sent her a "firing you as a client" letter. She emails the other day and said "I received another letter from the IRS stating the 2009 issue is still open and you need to fix as you did a lousy job in 2009 for me." Should I ignore, call her and tell her to find another cpa? I want to call and tell her to go pound sand for all I care.....but don't know what happens with a grievance filed by her to the state board (which I'm sure she would do as she is hell bent on blaming me). THanks.

Tax Writer (talk|edits) said:

25 May 2012
I don't know if you have a responsibility because of your licensing, but if it was me, I'd tell her to go fly a kite.

But then again, I don't put up with much.

Podolin (talk|edits) said:

25 May 2012
She sounds like ongoing trouble. and resigning from her work is the right answer. But first, why, if she amended 2009, is IRS still saying it is a problem? Once you are sure you are not the problem, extricate yourself. Life's too short.

Joanmcq (talk|edits) said:

25 May 2012
Did you respond to the AUR notice, or send a regular old amended return? If you did the latter, the problem with the AUR notice may have gone to a notice of deficiency because it wasn't addressed through AUR.

Actionbsns (talk|edits) said:

25 May 2012
EJH, if I understand what you have explained, I think everyone has that happen from time to time. If 1099 information has been left off a return as an oversight, IRS usually calculates the additional tax due and informs the taxpayer in their letter. When a client brings me that letter we review it for accuracy and to see if there is an adjustment that needs to be made for some reason or if the 1099 and additional tax are accurate. If they are accurate, I discuss it with the client and tell them to pay the additional amount. No amended return should be necessary since they respond with the voucher that is part of the IRS letter. Was your situation more complicated than that?

I think Joan is right in that you needed to respond to the AUR notice in order to close it out. Can this be resolved with a fairly quick letter just so the client will go away less than ticked off and you will sleep better at night?

Ejhcpa (talk|edits) said:

25 May 2012
You are all awesome for the quick responses. I will check and see if I need to respond to the AUR notice. Thanks===she just has me so irritated.....I didn't tell you all that she also feels free to just show up at my office without an appointment and demand to see me. She's the dictionary def of "horrible client"

Anarchrist (talk|edits) said:

26 May 2012
2008 she hires you to prepare her 2007 return. You charge her $250. She was a pain.

2009 she hires you to prepare her 2008 return. She was a pain. You charge her $250. That was a big mistake. If she was a pain you should have increased the price. Even if she wasn't a pain, she's wealthy which probably means she doesn't have a basic $250 tax return. So you should have upped the fee no matter what.

2010 she hires you to prepare her 2009 return. She was a pain. You charge her $250. Another huge mistake. She's your biggest pain in the ass client and you have let her slide with a low fee for three years.

2011 she hires you to prepare her 2010 return. She was a pain. You charge her $250. Mistake #4. November she receives an irs letter. You state she didn't give you a 1099. She believes you made a mistake. If the evidence indicates she didn't give you a 1099, why doesn't she believe the evidence? Why did she leave that meeting claiming you made a mistake? If the mistake was her's, why didn't you bill for the amended return? If the evidence shows she made the mistake, why didn't you inform her of the fee to amend prior to amending and present a bill with the amended return?

2012 she hires you to prepare her 2011 return, after which you fire her. She now receives another letter on 2009. If the evidence is clear that the mistake is her's, present that evidence to her and remind her that you have fired her or tell her the fee to respond will be $xxx.xx and she will be required to pay in advance.

Joanmcq (talk|edits) said:

29 May 2012
Yah, PITA fee. And yes, if you didn't respond to the AUR notice (if it's correct, she should just pay, but if it's stock sales, you need to provide basis), that's why she has another letter.

CrowJD (talk|edits) said:

29 May 2012
I basically agree with Anachrist. Use this client as a learning experience. This lady is a lawsuit waiting to happen and she was flashing signals almost from day one.

If you ever have a client you truly can't stand, get rid of them or don't take them to begin with. The reason is that you will begin to hate everything connected to them and you will avoid their file. This is when the seeds of a lawsuit get sown.

A mid-sized or large firm can tolerate these type clients better because they have the staff to nurse them. However, people like this can sink a small practice. Avoid them or get rid of them quickly and spend your time worrying about your good clients.

RazorbackCPA (talk|edits) said:

30 May 2012
I'm learning this CrowJD. I'm learning this. (That's me trying to convince myself I'm learning to fire problems clients as soon as I realize they are problems)

Tstolley (talk|edits) said:

30 May 2012
If the notice is right. She just has to pay the tax. I would imagine she didn't so it's on her to fix. She can find a new CPA to bug about the notice if she doensn't like your response. There are plenty of young bucks out there eager to take this BS on.

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