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Can I terminate an unprofessional relationship with a CPA who inappropriately prepare

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jmep

Junior Member
What is the name of your state (only U.S. law)?
New York

Good Afternoon. The tax return in question is for a Supplemental Needs Trust. The Trustee filed for an extension on the 2015 taxes because he ran out of time. We since have had a change in Trustee June 2016. The CPA was told we would get to him with all the documents he needed to prepare the return properly long before the due date of 9/15/16, however, he took it upon himself to prepare them in June anyway. He sent the new Trustee a confusing letter of instructions and demanded the return be signed, and checks be written within 4 days of sending it to her, including payment of his 395. bill. In looking the returns over Fed NYS, the Trustee noticed some errors as he did not have all pertinent documentation as well as general unprofessionalism in the preparation. The CPA asserts that the former Trustee who filed with him for the extension has NOT signed a contract nor a letter of engagement. Can we seek out another CPA to complete the returns correctly and with our confidence, or can we be taken to court for the 395. charge? Again, he prepared the return even though I told him we'd get him all he needed, and did not wait. Thank you very much.
 


LdiJ

Senior Member
What is the name of your state (only U.S. law)?
New York

Good Afternoon. The tax return in question is for a Supplemental Needs Trust. The Trustee filed for an extension on the 2015 taxes because he ran out of time. We since have had a change in Trustee June 2016. The CPA was told we would get to him with all the documents he needed to prepare the return properly long before the due date of 9/15/16, however, he took it upon himself to prepare them in June anyway. He sent the new Trustee a confusing letter of instructions and demanded the return be signed, and checks be written within 4 days of sending it to her, including payment of his 395. bill. In looking the returns over Fed NYS, the Trustee noticed some errors as he did not have all pertinent documentation as well as general unprofessionalism in the preparation. The CPA asserts that the former Trustee who filed with him for the extension has NOT signed a contract nor a letter of engagement. Can we seek out another CPA to complete the returns correctly and with our confidence, or can we be taken to court for the 395. charge? Again, he prepared the return even though I told him we'd get him all he needed, and did not wait. Thank you very much.
Ok, it would be normal for a CPA to send a letter of instruction with tax returns as well as asking for payment etc. So, its possible that the CPA did not realize or remember that he/she didn't have everything and that is why he/she prepared the return. Has anyone picked up the phone and reminded the CPA that he/she did not have everything and that therefore the return is wrong?

However, since the returns are wrong you are not obligated to pay for them and yes, of course you can have someone else prepare them instead. Standard practice in my industry is that payment is not due if the returns do not complete. Sometimes a non-refundable deposit is collected upfront if we know that there is going to be an unusual amount of work involved.

Once again, it is likely unfair to assume that the CPA is doing anything nefarious if no one has actually spoken to the CPA.
 

AdjunctFL

Member
If you have a CPA who “demanded the return be signed, and checks be written within 4 days of sending it to her, including payment of his 395 bill” then you have a CPA who has forgotten that you are the client, and that he works for you. You can always sever such a relationship. The only question is whether you owe the $395 bill.

Most likely he feels you do owe it and you feel he doesn’t. However, Many CPAs and other professionals would never try to collect a $395 bill because it’s not worth the effort, can end up with counter claims for negligent or unprofessional work, and not help their reputation in the community. Whether this CPA feels that way can’t be determined here.

Another solution is to let the CPA know there are errors on the return due to his haste and request he prepare a correct return. Most would do so at no additional charge if they understood the error was their fault. If he’s willing to do that, you can always let him and find a new CPA next year.
 

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