Be Careful When Choosing Your CPA

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Be Careful When Choosing Your CPA

Ashley Cast
Real Estate Investor · Victorville, CA · Member since 2016 · 35 posts · 7 votes

Hello Biggerpockets members,

I wanted to post something to kind of caution others about choosing their CPA. This is happening to a family member (they do not invest).

Last night, a family member received a letter from the company they work for that stated the IRS contacted them and they are going to garnish their wages for back taxes in 2014.

Now, to give a little back story. This never knew they owed taxes in 2014. This would be the year they changed CPA because the CPA did not fill the tax forms and filed multiple extension because the CPA did not have enough time to do them. At the end of 2015 maybe beginning of 2016 they received a letter saying they owed taxes. So, they took the letter to the new CPA. They said "no problem they would handle it".

Apparently, they did not take care of it. Since, they got this letter last night. They called their CPA last night and they said they will not do anything about it. So, they called the number their work provided. Their company said, they could not do anything but call this tax lawyer. They called this tax lawyer and he said for him to even look at the case you have to pay him $2k upfront. Then, if he can help you then you would have to pay him $300 twice a month until he handles the situation or not.

The reason I know all this is because they told and asked for my help. I told them to find a new CPA that would be willing to overlook their past taxes.

So, they found a CPA that would look over their taxes and see what they would be able to do.

The point of this very long story is make sure your CPA does what they say they will. Also, do not hire a CPA that recently let go all their staff members during tax season.

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Jim KennedyPro Member
Accountant · Cherry Hill, NJ · Member since 2016 · 173 posts · 201 votes
9y

@Ashley Cast That stinks. Note that CPA's are not the only ones who create these problems. You can get these same problems from an enrolled agent or a tax attorney too. 

Consider contacting the State Board of Accountancy and filing a complaint. When you do that, the firm MUST respond and resolve it satisfactorily or they could be fined, have their license suspended or even revoked!

Please let us know how it works out.

Jim Kennedy  

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  • Daniel HymanBusiness Member
    CPA · Milwaukee, WI · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    @Ashley Cast 

    That's a terrible story. I really hope the new CPA is able to help out your family member. 

    I tell people all the time to make sure you chose a CPA who is a good communicator.  CPA's are not infallible, but clients have every reason to expect their CPA to communicate a mistake that was made and to carry a high standard of integrity.

    My Online Accountant572 Reviews
    WebsiteView Page
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  • Ashley Cast
    OP
    Real Estate Investor · Victorville, CA · Member since 2016 · 35 posts · 7 votes
    9y

    @Daniel Hyman

    I also hope this new CPA helps them out too.

    At least the new CPA said he would look their taxes for free. Then, charge if he can help. Not many of those around in my or their area.

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  • Jim KennedyPro Member
    Accountant · Cherry Hill, NJ · Member since 2016 · 173 posts · 201 votes
    9y

    @Ashley Cast That stinks. Note that CPA's are not the only ones who create these problems. You can get these same problems from an enrolled agent or a tax attorney too. 

    Consider contacting the State Board of Accountancy and filing a complaint. When you do that, the firm MUST respond and resolve it satisfactorily or they could be fined, have their license suspended or even revoked!

    Please let us know how it works out.

    Jim Kennedy  

    2Reply
  • Jana CainPro Member
    Enrolled Agent · Richmond, CA · Member since 2016 · 225 posts · 148 votes
    9y

    @Ashley Cast Oh dear, that is truly awful! That is great that the new CPA is willing to review their taxes for free. Please do let us know how it all works out.

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  • Michael T. Breen
    Plaistow, NH · Member since 2016 · 9 posts · 7 votes
    9y

    It sounds like the IRS prepared a SFR (substitute for return) for 2014. The IRS has the legal authority under IRC 6020b to prepare a return for a taxpayer when they failed to file a return. The majority of the time the return the IRS prepares and assesses a tax that is much greater than actually due. This is because they don't consider all your deductions. When the taxpayer files the actual return the IRS will adjust their figures. The taxpayer's employer more than likely received a levy notice from a branch of the IRS called ACS (Automated Collection Services). They automatically sent out levy notices. Part of the motivation in the IRS serving levies is to bring the taxpayer into compliance (ie unfiled tax return 2014). You may be able to handle this your self by simply calling the IRS and explaining the circumstances. They may release they levy and set a deadline for you to file the return. If that doesn't work, entering into an installment agreement will release the levy. The IRS will agree what they call a streamlined installment agreement if you owe less than $25K and can full pay within 72 months. This may put a Band-Aid on it until you file the return. If that doesn't work and the levy is creating a financial hardship (unable to obtain housing, medical etc) you can file Form 911 with the Taxpayer's Advocate. I hope this helps.

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  • Ashley Cast
    OP
    Real Estate Investor · Victorville, CA · Member since 2016 · 35 posts · 7 votes
    9y

    @Michael T. Breen

    Taxes were filed for 2014. And the amount is less than $6k.

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  • Michael T. Breen
    Plaistow, NH · Member since 2016 · 9 posts · 7 votes
    9y

    There should be no problem with getting an installment agreement. Once the IRS approves the installment agreement they will release the levy. When calling the IRS have a fax number handy and request that they fax the levy release. Normally they just mail the release. This should be able to accomplished with a single phone call.

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  • Ashley Cast
    OP
    Real Estate Investor · Victorville, CA · Member since 2016 · 35 posts · 7 votes
    9y

    @Jim Kennedy

    My family member went to the new CPA today. They found a huge error in their taxes. The huge error is being handling through it will take a couple days to get the information gather and filed and the long process of IRS and state to look at them. The CPA also assisted them in getting a payment plan so their check should not be garnished.

    The huge error was the company they worked for rolled their 401k into another company. The CPA that did the taxes put down that the money was taken out of the 401k for personal use.

    The great thing I found about this CPA is that he was very upfront with them. Also, helped them find alternative routes in aquireing the information needed that would not cost as much and take the least amount of time.

    Luckly, it was a weekday.

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