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Discussion:Refund for error

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Gsjcpa (talk|edits) said:

27 March 2008
A client just received a CP2000 from the IRS stating he owes an additional $1000. The IRS is correct because I failed to report child care benefits from box 10 on the W-2. It was later in the 2006 tax season, I was probably at return #200+ and I just missed it.

I offered to pay the interest (approx. $100) but I'm wondering if I should refund the client some of my prep fees or a portion of the $1000. Does anyone have any guidance on something like this? I've been preparing returns for a while but fortunately have not had this situation before. Thanks.

Jdugancpa (talk|edits) said:

27 March 2008
Hey, stuff happens. Was a penalty incurred that was your fault? Pay the penalty. Interest? Well, he had the use of the $1000 for a period of time, so wouldn't the interest rightfully be owed by the one who had use of the money? How important is this client to you? An offer by you to pay all or part of interest or to rebate a portion of the prep fee would be more than generous. Everybody errs at times. If you were perfect your bill rate is probably too low.

Kwcpa (talk|edits) said:

27 March 2008
I hate that box 10 - easily overlooked - credit the interest against their next invoice and move on

Bjeter (talk|edits) said:

27 March 2008
I would pay the interest and/or penalties and that's it. Do not pay the tax, that's ALWAYS the client's responsibility. I also would not discount your fees since you did the same amount of work. I just fired a client over the same issue. He said H&R Block would pay the tax for any mistake. I told him to go to H&R Block, not give them the 1099 he didn't give me and see if they would pay. He called me a smart a$$ SOB and slammed my door on the way out. I love dealing with the public.

Gsjcpa (talk|edits) said:

27 March 2008
Thanks for the feedback. I'll take the advice of paying the interest and move on.

Tfortaxes@msn.com (talk|edits) said:

27 March 2008
I offer to pay the interest and penalty that is my part. I then offer a refund or a credit for a "free" return next year. sounds like your guy was just a twit anyway so hopefully you will never see him again. Oh wait! whats that ringing sound. Oh Yeah, its the phone with another new client and now I have room for him! I have decided I do NOT want cranky whinners as clients. I avoid their phone calls, refuse to answer the emails and keep praying that they will just go away. Most of the time they do. One particular hard head took almost three years before he "caught on" that I did not want him as a client. Move on.

Fsteincpa (talk|edits) said:

27 March 2008
Did i mention the power went out the other day. Phones didn't work until noon. Oh, I love power outages, it was soooooo peaceful.

JR1 (talk|edits) said:

March 28, 2008
Does the client pay you for their mistakes? Usually not, so I'm not generally inclined to pay for mine, either. If forced, I will pay a penalty or discount future services. That's been it so far. Well, I did refund one last year that we mutually decided should just go away. Can't wait to throw those returns into the shredder. Two more years.

Ourtuition (talk|edits) said:

28 March 2008
It was your error, offer to discount next years fees equal to the interest and perhaps an add'l $50. the client will be back and think that you are a reasonable guy, no bad PR and usually everyone is happty

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