Are we right to expect our old CPA to handle this problem?
September 18, 2020 6:20 AM   Subscribe

YANMCPA of course, but how would you handle errors on forms you prepared for someone who is no longer a client?

Our old CPA wasn't great, so we used a new one for our 2019 taxes. New CPA found an error on 2018's taxes because of something the old CPA didn't do. We asked old CPA to refile, which he did. All good, or so we thought.

Fast forward to last weekend, when we received a CP2000 letter from the IRS regarding underreporting on our 2018 taxes. There were several issues, including some forms we seem to have neglected to include, as well as at least one instance of dollar figures from documents we DID include, which old CPA neglected to enter on our returns. We definitely do owe the IRS, but one of the errors was absolutely made by our old CPA. Old CPA says we're not his clients anymore, so we should have our new CPA handle it.

(Yes, we've already been in touch with the IRS and have received an extension so we have a little more time to sort things out.)
posted by anonymous to Work & Money (8 answers total)
I'd consider if you want someone who has a history of making mistakes when doing paid work for their clients resentfully handling correcting the errors as freebie job, even if they technically may have some obligation to do so. You're probably better off just paying the new CPA to sort things out and moving on with your life.
posted by Larry David Syndrome at 6:38 AM on September 18, 2020 [23 favorites]

In this case, I don't know if who "should" handle this matters as much as figuring out what will cause you the fewest headaches. Personally, I would stop bothering with the old/incompetent CPA and have your new CPA fix this. Less unpleasantness and trouble for you, your new CPA is more motivated to keep you happy, and also less likely to make further errors for you to be unpleasantly surprised by later.
posted by Narrative Priorities at 6:39 AM on September 18, 2020 [2 favorites]

You should correct this with your new CPA. You have terminated your relationship with your old CPA, so that's that.
posted by DarlingBri at 6:46 AM on September 18, 2020 [1 favorite]

I agree that this is a job for the new CPA. My wife and I have been in this situation and we found that the new person (a better fit for us) was able to resolve this stuff in away that actually made sense to us.
posted by Ignatius J. Reilly at 6:52 AM on September 18, 2020

Ideally, old CPA would pay at least part of the cost for new CPA to fix things. That would likely involve having a lawyer send a letter etc to old CPA, at a minimum. So, the key question is how much money is at issue, which will tell you if it is worth your while to pursue Old CPA for at least part of the cost.

(It sounds like there were a mix of errors by you and CPA; this will make it more complicated to figure out how much of the cost Old CPA should bear.)
posted by Mid at 6:59 AM on September 18, 2020 [2 favorites]

I had the same kind of issue, and my new CPA actually called my old CPA to see if he wanted to fix it. The old CPA actually refused because we obviously weren't going to be his clients any more. It was astounding to me as far as professional responsibility, but after the kinds of errors that were made, I didn't trust the old CPA to be able to even open an excel worksheet, so I was just out the money for penalties on the mistake. If it were the kind of money that would justify a lawyer, I would have sought some kind of restitution.
posted by LionIndex at 7:09 AM on September 18, 2020 [1 favorite]

I'm in the middle of something like this, where very large sums of money are at stake. (Not my money, but I"m the trustee of someone else's estate.) In short: have new CPA handle it then decide if it's worth your money to sue your old CPA -- for the $ you originally paid him + the $ it's costing you now to handle it. It may not be worth it unless very large sums are involved.
posted by BlahLaLa at 7:09 AM on September 18, 2020 [10 favorites]

If old CPA is actually a CPA, he is probably licensed by the state where they practice. You can look this up and see whether you would have grounds to file a complaint against his license. The people who decide are all going to other CPAs so you need a good, clear case but the threat of a complaint might help you get a positive response to a reasonable request for him to pay for fixing his mistakes.
posted by metahawk at 10:59 AM on September 18, 2020 [2 favorites]

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