- quote -

Before or after that letter gets sent to the client?

Seth

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Many. It goes all the way from a little old lady on a fixed
income who had a stroke and heart attack, and whose son has
failed to pay me --- all the way to an upper income couple
who were just jerking me around by asking which checking
account he should write the check from (I answered him
twice). This one I referred to a collection agent whom we
both knew. He played a similar trick on the collector but he
finally paid up. Then the collector gave me a bounced check.

The worst one was the couple who have paid me very late for
several years and when I made them pay me in advance balked
about it. He finally gave me a check which I immediately
took to his bank to get cashed. It was rejected for
signature irregularity. The bank called him to authorize
payment and he asked to talk with me. Then began the phony
accusations of fraud and rip off and unfair business
practices by him and my simple statement: either I walk out
of here with the cash and go home to print and mail your
return or I walk out of here with your check and go to the
local Police Department to file check fraud charges against
you. He told the bank to pay. After I sent them their tax
returns I immediately sent them a termination letter
advising them to secure preparation/representation services
to replace me.

Funny how most of these people are affiliated with Multi
Level Marketing. I have managed to get rid of nearly all of
my MLM clients. The others pay my invoice on receipt.

Linda

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DORFMONT[at]aol.com (Linda Dorfmont) wrote:

- quote -

I don't think you can absolve yourself of responsibility for
a return by claiming you were not paid. As long as there
was an explicit or implicit agreement for compensation you
remain the preparer (Reg 301.7701-15(a)(4)). Otherwise, one
who prepared a troublesome return could simply refuse
payment to escape liability.

- quote -

I see no duty in Circ 230 or elsewhere that you "must"
inform the IRS of an error on a return. I do see that Circ
230 requires a preparer to inform the taxpayer of an error.

Jim Fritzsche, CPA

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Jim Fritzsche wrote:

- quote -

To add to what the NAEA FAQ says, we are also bound to our own
state society ethics. And finally to our own personal set of
ethics.

anyway, think I mentioned above, that once a client has not
paid me, he is no longer an active client, but becomes inactive
ten days after I mail the statement.

Reinstatement is at my discretion.

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

As I stated, I've never done it; don't even have a Word
template for doing it, which is why I'm interested in maybe
getting hold of a copy of that letter referred to above.

However I do know it has been done before and was discussed
on this board in some time past. Could have been a long
time past in fact.

At any rate, if I've goofed and forgot to collect from a
client when he picked up his return, and he ignores my first
statement, he is no longer a client, and I would have no
compunction about informing IRS of that fact. After all,
who are they going to tell that I have withdrawn my name as
paid preparer? The ex client? (grin

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

Linda,
How many times in your career have you not been paid?

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Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:
- quote -

According to the National Association of Enrolled Agents
website FAQ, enrolled agents are ethically bound only by US
Treasury Dept Circular 230. Meanwhile, CPA's and attorneys
are bound by Circular 230 AND their own professional
standards. And yes, a person/entity you have done work for
and from whom you are trying to collect sounds to me like an
active client.

Jim Fritzsche, CPA

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- quote -

Harlan,

I am not familiar with the concept of "revoking the
signature." Can you elaborate on how this would be done? It
seems to me a preparer's signature would be irrevocable on a
return he or she prepared. The ability to revoke a signature
would be useful in defending preparers (both criminally and
civilly) who are provided with false information, or who
fail the 230 due diligence standard. Also, is there any case
law supporting the idea of an "active" client? Much of my
practice is the defense of preparers but I have never run
across either concept. I know you are at the top of the EA
profession so I appreciate any enlightenment in this area.

Timothy E. Kelly, Esq.
Certified Specialist, Taxation Law
Board of Legal Specialization
State Bar of California

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Arthur Kamlet wrote:
- quote -

Two very GREAT answers, from Stu and Art. So it's a tie. I
owe each one a drink. Nest time I shee em. hick!

ChEAr$,
Harlan Lunsford
Tue, 19 Oct 2004 16:02:32

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What I send to the IRS is a "confession" that I have made a
false statement on the return and want to correct it. I have
signed the return as a paid preparer and I have not been
paid. I am therefore revoking my signature as a paid
preparer on the return. The IRS is free to do whatever it
wants including throwing the whole letter in the trash.

What I send to the client (or former client at this point)
is a similar letter stating that I must inform the IRS of
this erroneous statement that I have made on their return. I
also point out that this will call attention to their return
and the IRS may take action including auditing the return or
charging them with perjury for signing that I have been
paid. I remind the taxpayer that I will not assist them with
the audit should it happen nor will I assist anyone they
hire to represent them. I am not the paid preparer on that
return. At this point there is no longer a preparer-client
relationship; it has degenerated to victim-thief.

Linda Dorfmont E.A., CFP, CSA

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Harlan Lunsford <hnslunsford[at]bellsouth.net> wrote:

- quote -

Oh, how soon we forget!

That was you, Harlan!

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Stuart Bronstein wrote:
- quote -


Stu!
Here's what to dew!

(tried to make it rhyme... anyway...)

We all should query the medical profession on their charges
for various "procedures" before engaging their services.
The reason they charge so much in my opinion is not just the
old standby - "well, I spent seven years becoming a
doctor.), but cost of doing business in handling
insurance claims. There ARE doctors out there who deal in
cash only, meaning no insurance claims, not saying they're
"taxfreecash only" types.

I even have one client who with no health insurance does
talk with his doctor/office manager, whoever about the cost,
and always gets some reduction in his bill.

When I was scheduled for an MRI years ago, I called around
the three hospitals and got quotes even. Still cost me what
I consider big bucks of course.

And doctors/dentists should not make an argument for the
fact their fees after insurance are tax deductible, cause
there are a lot of people who can not itemize.

Just my three cents worth.

ChEAr$,
Harlan Lunsford, EA n LA

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Timothy E. Kelly, Esq. wrote:
- quote -

Yes, of course we do have responsibilities to those "active'
clients. And one who does not pay, is not an active
client. right, Linda?

And although I haven't seen the letter mentioned above, all
she said was that the letter "tells them I'm going to call
IRS attention to their return.....", while not threatening
to tell any tales out of school.

What I think the letter really means, is that if payment is
not to be had by a certain date, the preparer has the right
to disassociate him/herself from the return by revoking the
signature. This in and by itself does NOT snitch on the
client, but gets the point across that the (by now)
previous preparer is no longer associated with the return.

I've never had to DO that of course, since I most always get
paid up front.

but I like the idea.

ChEAr$,
Harlan Lunsford, EA n LA

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Just want to thank those of you who wrote with estimates or
statements of your charges. It will be helpful in dealing
with this client who hasn't paid me.

Jan Zobel EA

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Harlan Lunsford wrote:

- quote -

Abraham Lincoln's haberdasher.

Stu

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DORFMONT[at]aol.com (Linda Dorfmont) wrote:

- quote -

Most CPA's would never threaten to call IRS attention to a
client's return because we are ethically bound (outside the
courtroom) to seek the client's permission before divulging
any of the client's information to anyone. That said, it
looks to me that a collection letter such as the one
described above would violate Circular 230.

First of all, if one is bound by Circular 230 and prepared
and signed the return, there should be nothing on the return
to call attention to. That is, all material items will be
well supported by law, regulation, etc... If this is true,
then one would need to use false or misleading information
to call IRS attention to something on the return (see
section 10.51 – incompetence and disreputable conduct.) If
the return does contain truly questionable items, then
section 10.22 – Due diligence as to accuracy in preparing
the return – has been violated.

Jim Fritzsche, CPA

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DORFMONT[at]aol.com (Linda Dorfmont) wrote:

- quote -

If a lawyer called the IRS to "call attention" to a client,
they would be disbarred, sued and possibly prosecuted. I am
not familiar with the ethics governing an EA outside those
in Circular 230. Is it true an Enrolled agent has no
equivalent fiduciary duty to a client? I have often hired
EA's under a "Kovel" letter and I have always believed they
have the same duty to a client as I do.

Timothy E. Kelly, Esq.
Certified Specialist, Taxation Law
Board of Legal Specialization
State Bar of California

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Linda Dorfmont wrote:

(snipped....

- quote -

I'd be interested in reading this form letter, Linda.
Could you post it here or send me a copy? (just remove the
ns embedded within the reply to address above.)

ChEAr$,
Harlan Lunsford, EA n LA

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CLJ1219 wrote:

- quote -

Somebody once said: "You can please all your clients some of
the time, And you can please some of your clients all the
time, but.... You can't please all your clients all of the
time."

Who was that?

ChEAr$,
Harlan Lunsford

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Frederick Jorden wrote:

- quote -

My long-time dentist retired, so I tried someone new. They
do great work, but their charges are high (I had a cleaning
and X-rays, and it cost $500). I asked if they would charge
me (I pay cash on the day I have work done) the same thing
they charge their patients with insurance. They turned me
down.

So they won't get any more of my deductible medical expense
payments. (Had to bring it on topic, of course.)

Stu

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