CPA/Tax Specialists and Accountability (CPA's please check in!!)

Factual Questions
1

First, a bit of information:

I’m a US citizen, my husband is a green card holder for the US, with Irish citizenship. We lived for half of the year 2001 in the States and the other half in France. This is not our first experience with expat tax filing.
We use a knowledgeable tax accountant in the State of Washington to do our taxes. This year, the fee was $350. My husband worked in one state and lived in another, so that was two forms right there, in addition to all the necessary expatriate forms.

We get an automatic extension for living abroad, and sent in our taxes in mid-May. This morning I looked on the IRS website to see if there have been any updates on our refund check status.

Our account informed us that we’d be getting $1842 back from feds and $611 from the State of Missouri. We got the Missouri check already.

This is the message we got:

"Refund Status Results Printer

We found mistakes on your tax return which caused us to change the amount of your refund.
Please talk to one of our representatives or wait for the notice we sent you for more information.
The balance of your refund $744.00 will be mailed on 07-05-2002. If you do not receive the refund by 08-02-2002 please contact us again. We are unable to take any action until then. If you receive a notice and you have questions, please call the phone number on the notice.
Please read the following information related to your tax situation:"

So, it seems that they are going to give us only $744 for a refund, rather than the $1842 our accountant said we’d get. I’ve already written to the accountant to inquire about what to do, but what are her responsibilities in this matter?

If it was an error on her part, is it possible for us to get the fee ($350) back from her? What are the laws and regulations in this situation.

Her name is written on the taxes with her ID # and contact information. Does that make her eligible to call the IRS on our behalf?

The reason I ask is that we can’t make 1-800 calls from France and I don’t fancy spending hours on the phone trying to sort this out, at our expense.

Any advice would be welcomed!

2

I’m not sure on most of this - not without a lot more information, anyway, but:

Depends… is she an enrolled agent? An enrolled agent is qualified to represent you before the IRS; if she isn’t, then she can only attend a meeting and advise you. Does the IRS has an office at your nearest consulate/embassy? They could probably be of help anyway.

3

Galen, I’m not sure about the IRS having an office here, I’m pretty sure they do, but it only distributes forms.

The main question I have is this: Does the CPA or Tax specialist assume any responsibility for errors that arise from their completion of the tax documents?

Hopefully, this is a simple error, that can be resolved with a few calls placed by her to the IRS. I’ll keep you all up-to-date. She’s on the west coast, so I won’t know anything for another day, probably.

4

Oh, I forgot to mention, I’m assuming that the mistake is one she made, and not one that the IRS made.

Also, we gave her all of our documents, copies of French tax information, etc, so on our end, it was all completed without fault.

5

I’m not a CPA, by the way; I used to be a tax preparer for H&R Block. If it’s her mistake, she’s obliged to correct it. I don’t believe that she is obliged to refund your fee (legally, I mean - obviously she’s morally obliged to do so) - do you have a copy of your receipt/contract/whatever? It also depends on the laws where she is located.
In other words, I’m not sure, but I think you’ve lost the fee.

6

Yes, we do have a copy of the contract. If she can obtain the full refund for us, we won’t expect her to refund our payment of her fee.

However, if it was her mistake, and we are in fact not going to get the $1842, it would probably cost more to seek legal counsel about it than it would to just give up.

I hope she can rectify the situation with the IRS directly. Otherwise, our holiday this summer will be pretty pathetic.

7

There is a line on the federal tax form (second page) that you can select to give the preparer the right to talk to the IRS on your behalf as a third party designee. If that option was selected then she will probably be able to discuss them with it.

I wouldn’t worry about it untill you find out why there was a change. It could be something very easily fixable. Check to make sure your SSNs are correct on the return you filed if you have a copy of it hand. They take away your deduction/exemption if a SSN is wrong. It is easy to fix (probably with just a phone call.)

8

I’m sure she’d be willing to investigate as part of her services to you. As to whether or not she’s obliged to give you a refund for the $350, I believe that has more to do w/ contract law than accounting…

If that was her standard fee regardless of how much money you received back from Infernal Residue, I’d say you’d still owe it to her as long as she rectified the situation (regardless of how much money you actually get back).

9

Anahita, just as a precaution, you might want to make sure that you are not at fault instead of the tax preparer. Sometimes taxpayers inadvertently give the preparer incorrect information, such as that a quarterly estimate payment was made when in fact it wasn’t, or the taxpayers overlook an income item from interest or dividends. In these situations the tax preparer isn’t at fault at all.

10

Yay!

Good news. In fact, the problem was that my daughter’s SS # had an error in one digit. This was discovered when the IRS tried to connect her name, birthdate and SS # to claim her as a dependent.

So, we’ll not only get back the $1842 with interest, we’ll also get the amount we were short last year. This mistake could’ve been ours (in giving the acc’t the wrong number or writing unclearly) or her mistake. Either way, we’re looking at getting at least $2000 back now!

Woopee!

11

Coolness! Got a few hundred for a loan? :smiley:

Ow, don’t throw stuff! I’m just kidding!

12

Good to hear things worked out–always nice to get the big check from the government (although I’m obliged to point out that you gave them a $1,842 loan for quite some time at zero interest).

But assuming the fault was entirely your tax preparer’s, why should you get anything more from her or the IRS? You’re not out anything at all, relative to your actual tax liability–no interest or penalties. You’d only be getting back less than you had expected.

Well, you should get one thing from her. I would think professional courtesy (and the desire to ease her embarrassment at the miscalculation) would oblige her to recheck her calculations and check with the IRS to make sure the new amount is in fact correct, or to press the case (or inform you) if this is one of the many gray areas of tax law. But if your actual refund should have been $744, well, don’t count your chickens before they hatch.

But obviously, $1842 is better than $744.