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  1. #1
    Join Date
    May 2016
    Posts
    3

    Default Disagreement With CPA Over Filing an Amended Tax Return

    Long story short. My primary residence in California was foreclosed on in early 2015. The lender set me a 1099-C, after I'd already filed taxes for 2015, alleging that I was personally responsible to pay back the loan even though the loans - being purchase money loans - are non-recourse here. I then hired a CPA to help me "take care" of this situation. He indicated that he would file an amended return in "due course" (after he had finished filing all the other more important tax returns by April 16, 2016). His claim was that he could do this since I had 3 years from the date of filing the original return to file an amended return, and that the IRS would not even begin matching their records with our returns until at least July, 2016.

    I then contacted the bank, and insisted that they correct their erroneous 1099-C. After several weeks, they issued an amended 1099-C in which they did not check the "debtor is personally responsible to pay back the loan" box. I notified the CPA of this and sent him the amended 1099-C. Never heard a word back from him.

    Fast forward to last week, I received an "invoice" for $500 from this CPA, stating that it was for "preparing both the 2015 return and the amended return". I noticed that the invoice did NOT say that the amended return had been filed, only that the return had been prepared. I emailed this guy IMMEDIATELY and asked him why he was charging me for preparing the original return when I had given him copies of the original return that I had filed. He explained that he needed to create the original return to file the amended return. I then emailed him asking if he had filed the amended return already and he responded back saying he was busy and would get back to me "soon".

    Not a peep since, but another invoice appeared in the mail a couple of days ago, reiterating I pay his office $500. I left him a voice message and an email asking him if he had filed the amended return. Never got a response to either the voice message or my email.

    I also remember a conversation with him when this ordeal first started wherein he stated that he won't file an amended return UNTIL the IRS started "asking questions". When I sent him a copy of the amended 1099-C, he said "this is great", but still would not prepare an amended return. He repeated the need for me to wait to do so until the IRS began to "ask questions". I have a feeling now that he's going to come back and tell me that he is NOT going to file an amended return, since the IRS would have received a copy of the amended 1099-C from the bank, and would no longer "have any questions to ask". Please note that I NEVER RECEIVED a copy of the alleged amended return from him.

    I am angry and frustrated. Since I did sign a contract to pay him to prepare my amended return, I suppose I should pony up the $500, but should I demand that he file the amended return (as part of the contract) ? I would also appreciate it if people knowledgeable in tax law could tell me if the whole "they aren't asking any questions, so you don't have to explain anything" approach that this guy is taking is a legitimate approach or if it is only going to cause me more trouble and $$$$$$ down the line, should Uncle Sam decide to "ask questions" ?

    Should I just cut my losses and find someone else to file an amended return for me or just get copies of the amended return he claims to have prepared and file it myself ? I am really uncomfortable with the whole "be quiet until they come nosing around" stand (not to mention that he's NEVER said anything about filing AN AMENDED STATE RETURN) !!!

    Please help.

  2. #2
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Amended 1099-C from Lender, Cpa Refuses to File Amended Return

    Filing an amended return amounts to mailing it. If you want it filed then obtain a copy of your amended return and send it to the irs. If the accountant states he has not prepared it yet then tell them to not prepare it and go elsewhere if you choose.

  3. #3
    Join Date
    Jun 2015
    Posts
    27

    Default Re: Amended 1099-C from Lender, Cpa Refuses to File Amended Return

    You are the client.

    Your post seems to address two separate issues; the filing of an amended return and the CPA's invoice.

    IRS regulations do not require a taxpayer to file an amended return; however the taxpayer still is liable for correctly reporting his tax liability and is subject to penalties and interest. From an economic standpoint, it is wise to file an amended return sooner rather than later. From an ethical standpoint, I take issue with a tax professional who recommends waiting until the IRS detects the error. Essentially this advice is to see if one can get away with the incorrect original tax return. I doubt that a tax professional would recommend waiting for the IRS to detect errors if the amended return resulted in a refund due.

    If I read your post correctly, you engaged this CPA after you filed your 2015 return, correct? Yet the invoice is for "preparing both the 2015 return and the amended return". The invoice should be corrected if he did not prepare the original 2015 return. Since the invoice is not for consultation services regarding the amended return, but instead is for actual preparation of the return, at this point he has not earned his fees if you do not have a copy of the return. My advice would be to email him so this matter is documented in writing. Request that the invoice be corrected to remove reference to preparation of the 2015 return. Advise him that you will pay for his services once he provides you with a copy of the amended return and proof of filing. You might want to ask him to review his fee to ensure that he is not billing you for preparing two returns.



    I'm a CPA, not a lawyer.

  4. #4
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Disagreement With CPA Over Filing an Amended Tax Return

    Quote Quoting HelMe
    View Post
    Long story short. My primary residence in California was foreclosed on in early 2015. The lender set me a 1099-C, after I'd already filed taxes for 2015, alleging that I was personally responsible to pay back the loan even though the loans - being purchase money loans - are non-recourse here. I then hired a CPA to help me "take care" of this situation. He indicated that he would file an amended return in "due course" (after he had finished filing all the other more important tax returns by April 16, 2016). His claim was that he could do this since I had 3 years from the date of filing the original return to file an amended return, and that the IRS would not even begin matching their records with our returns until at least July, 2016.

    I then contacted the bank, and insisted that they correct their erroneous 1099-C. After several weeks, they issued an amended 1099-C in which they did not check the "debtor is personally responsible to pay back the loan" box. I notified the CPA of this and sent him the amended 1099-C. Never heard a word back from him.

    Fast forward to last week, I received an "invoice" for $500 from this CPA, stating that it was for "preparing both the 2015 return and the amended return". I noticed that the invoice did NOT say that the amended return had been filed, only that the return had been prepared. I emailed this guy IMMEDIATELY and asked him why he was charging me for preparing the original return when I had given him copies of the original return that I had filed. He explained that he needed to create the original return to file the amended return. I then emailed him asking if he had filed the amended return already and he responded back saying he was busy and would get back to me "soon".

    Not a peep since, but another invoice appeared in the mail a couple of days ago, reiterating I pay his office $500. I left him a voice message and an email asking him if he had filed the amended return. Never got a response to either the voice message or my email.

    I also remember a conversation with him when this ordeal first started wherein he stated that he won't file an amended return UNTIL the IRS started "asking questions". When I sent him a copy of the amended 1099-C, he said "this is great", but still would not prepare an amended return. He repeated the need for me to wait to do so until the IRS began to "ask questions". I have a feeling now that he's going to come back and tell me that he is NOT going to file an amended return, since the IRS would have received a copy of the amended 1099-C from the bank, and would no longer "have any questions to ask". Please note that I NEVER RECEIVED a copy of the alleged amended return from him.

    I am angry and frustrated. Since I did sign a contract to pay him to prepare my amended return, I suppose I should pony up the $500, but should I demand that he file the amended return (as part of the contract) ? I would also appreciate it if people knowledgeable in tax law could tell me if the whole "they aren't asking any questions, so you don't have to explain anything" approach that this guy is taking is a legitimate approach or if it is only going to cause me more trouble and $$$$$$ down the line, should Uncle Sam decide to "ask questions" ?

    Should I just cut my losses and find someone else to file an amended return for me or just get copies of the amended return he claims to have prepared and file it myself ? I am really uncomfortable with the whole "be quiet until they come nosing around" stand (not to mention that he's NEVER said anything about filing AN AMENDED STATE RETURN) !!!

    Please help.
    I would tell that CPA to give you back your documents, that you are no longer interested in using their services.

    Yes, they had to recreate your original return in their system in order to amend it, but 500.00 for that service, when they are refusing to give you an amended return to actually mail in NOW, is highway robbery as far as I am concerned...and still highway robbery even if they give you the completed amended return.

    I do agree that you need to amend your return now, because the 1099-C was not addressed at all on your return. You needed to include a form 982 with your return, excluding the income.

  5. #5
    Join Date
    May 2016
    Posts
    3

    Default Re: Disagreement With CPA Over Filing an Amended Tax Return

    Thank you, everyone.

    Given this background information, should we also be filing an amended California return ? I no longer trust this guy to do the right thing and would really appreciate your advise.

    Charlie, yes, the "invoice" very clearly says "preparing", not "filing" two returns, including the original 2015 return. As I hired this guy AFTER I'd already filed the return for the year, AND gave him both a pdf copy and a print out of the return I filed, I don't understand why I have to pay him to "recreate" that original return. Plus, as the fees are for actually preparing and filing the return (which is how I understood it) and as I have not yet received a copy of the amended return OR proof of filing, I don't see why I owe him anything. I am emailing him to document my complaint but I think at this point I should just ask for a copy of the amended return and file it myself (and would appreciate advise on how to proceed with a state return).

    Thank you all again !

  6. #6
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Disagreement With CPA Over Filing an Amended Tax Return

    Quote Quoting HelMe
    View Post
    Thank you, everyone.

    Given this background information, should we also be filing an amended California return ? I no longer trust this guy to do the right thing and would really appreciate your advise.

    Charlie, yes, the "invoice" very clearly says "preparing", not "filing" two returns, including the original 2015 return. As I hired this guy AFTER I'd already filed the return for the year, AND gave him both a pdf copy and a print out of the return I filed, I don't understand why I have to pay him to "recreate" that original return. Plus, as the fees are for actually preparing and filing the return (which is how I understood it) and as I have not yet received a copy of the amended return OR proof of filing, I don't see why I owe him anything. I am emailing him to document my complaint but I think at this point I should just ask for a copy of the amended return and file it myself (and would appreciate advise on how to proceed with a state return).

    Thank you all again !
    The fee should include the state amended return as well. Amended returns are not electronically filed. They have to be physically signed by the taxpayer and mailed in, therefore the CPA cannot "file" it for you.

    I am a tax professional myself. It is more complicated to file an amended return for someone if I did not prepare their original return...again because I have to recreate their original return in my system. Therefore, I do charge more to do an amended return for those clients. However, 500.00 is a very high price in my opinion, and outrageous when the CPA is refusing to actually produce the amended return so that it can be mailed in.

    Again, I would be insisting that the CPA return all of my documents to me and I would find someone else to prepare the amended return.

  7. #7
    Join Date
    May 2016
    Posts
    3

    Default Re: Disagreement With CPA Over Filing an Amended Tax Return

    Hi All,

    After reading the last post on this thread by ilworking, I emailed the CPA the same day (2 days ago) requesting a copy of the amended returns and that I will send in my payment once I have received the amended return. The response was that I should call to speak to him about it !!! I don't understand what I need to talk to him about -- I am done with this guy and just want to file the amendments ASAP to save myself from getting into more trouble with the IRS and CA FTB.

    Also, I hope I am not paranoid to think this but we (spouse and I) signed a POA for this person to represent us should the IRS contact us. I am now very concerned that the CPA is hoping to not file the amendment so that the IRS and the FTB start "asking questions", which would cost us even more (as in paying for the CPA's time to "talk to the IRS and the FTB"). How do I revoke this POA ?

    Mainly I am freaked out that this individual is in possession of EVERY. LAST. FINANCIAL and personal information of ours, and am worried sick as to what (if anything) s/he can do with all of this information that we gave him, thinking he was a professional !! Is there ANYTHING I can do to prevent misuse of our information in retaliation (once he learns that we don't intend to work with him anymore) ?

    Please advise.

  8. #8
    Join Date
    Jul 2015
    Location
    Florida
    Posts
    301

    Default Re: Disagreement With CPA Over Filing an Amended Tax Return

    There is nothing you can do to prevent anyone from misusing your information. That includes your doctor, your dentist, your insurance agent, and your CPA. Even your lawyer. What you can do, however, is to file a complaint with the state office that administers their license if they do something in appropriate (in addition to other legal actions you can take). People don't usually want to jeopardize their licenses for a couple of bucks - people work too hard to pass the CPA exam, so that would be the least of my worries.

    You just need someone competent, and you don't have that right now. So get your paperwork back and go to someone else. That should resolve all of your problems. No, your amended return(s) hasn't been filed because you haven't signed and mailed it. And typing the information into a system from the return you handed over is not "preparing" the original return. It is merely data entry. Yes, there should be a charge, but not the full charge of repairing the return. Just say no thanks to this jerk and move on.

  9. #9
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Disagreement With CPA Over Filing an Amended Tax Return

    Quote Quoting HelMe
    View Post
    Hi All,

    After reading the last post on this thread by ilworking, I emailed the CPA the same day (2 days ago) requesting a copy of the amended returns and that I will send in my payment once I have received the amended return. The response was that I should call to speak to him about it !!! I don't understand what I need to talk to him about -- I am done with this guy and just want to file the amendments ASAP to save myself from getting into more trouble with the IRS and CA FTB.

    Also, I hope I am not paranoid to think this but we (spouse and I) signed a POA for this person to represent us should the IRS contact us. I am now very concerned that the CPA is hoping to not file the amendment so that the IRS and the FTB start "asking questions", which would cost us even more (as in paying for the CPA's time to "talk to the IRS and the FTB"). How do I revoke this POA ?

    Mainly I am freaked out that this individual is in possession of EVERY. LAST. FINANCIAL and personal information of ours, and am worried sick as to what (if anything) s/he can do with all of this information that we gave him, thinking he was a professional !! Is there ANYTHING I can do to prevent misuse of our information in retaliation (once he learns that we don't intend to work with him anymore) ?

    Please advise.
    I told you to ask for your documents back for a reason. Insisting that he provide you the amended return was a huge mistake. Please consider following my advice and demanding your documents back and then find someone else to do the amendment.

    Just to give you an example of why I am giving you this advice my firm would charge someone no more than about 200.00 to do that kind of amended return...and half of that if we did the original return.

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