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Started By
Message
Billing dispute with CPA
Posted on 6/11/14 at 8:30 am
Posted on 6/11/14 at 8:30 am
I wanted to get the advice of the Money board on this situation I am dealing with.
I received a notice by the IRS in 2012 saying I owed some unpaid taxes, about $1000, from 2010. That was my first year paying taxes and was in graduate school the first half of the year. Because I used turbotax and didn't have a CPA I used a guy that does the taxes from my mom's company.
He reviews everything, said that the IRS didn't have evidence I was in school and needed that so the deduction I used could stand. He gets the needed info, sends a letter to the IRS, and said that it should be taken care of. Charges me $525 to review everything and send a letter. I continue to receive letters with increasing penalties and interest. I speak with him and he says it can take them months for them to process. Finally after a year he has to contact them again. Another $265 charge.
Well fast forward to 2014 and the IRS letters continue but now they are threatening a levy on my account. He contacts them again and says they never received his original letter and can't tell him why. He has to send another letter to try and resolve the levy and I have to contact my bank to release the levy. Charges me again $300 and $150 for the last letters and phone calls with the IRS. (I haven't paid those bills yet)
So basically I am still dealing with this issue and he has charged me more than I originally owed. I am off base that there is no way I should pay him the last $450 he charged?
I received a notice by the IRS in 2012 saying I owed some unpaid taxes, about $1000, from 2010. That was my first year paying taxes and was in graduate school the first half of the year. Because I used turbotax and didn't have a CPA I used a guy that does the taxes from my mom's company.
He reviews everything, said that the IRS didn't have evidence I was in school and needed that so the deduction I used could stand. He gets the needed info, sends a letter to the IRS, and said that it should be taken care of. Charges me $525 to review everything and send a letter. I continue to receive letters with increasing penalties and interest. I speak with him and he says it can take them months for them to process. Finally after a year he has to contact them again. Another $265 charge.
Well fast forward to 2014 and the IRS letters continue but now they are threatening a levy on my account. He contacts them again and says they never received his original letter and can't tell him why. He has to send another letter to try and resolve the levy and I have to contact my bank to release the levy. Charges me again $300 and $150 for the last letters and phone calls with the IRS. (I haven't paid those bills yet)
So basically I am still dealing with this issue and he has charged me more than I originally owed. I am off base that there is no way I should pay him the last $450 he charged?
6
Posted on 6/11/14 at 8:36 am to saderade
Call the IRS and pay them. You can even set up a monthly plan to pay if you cant afford what you owe in full.
Screw the CPA. You could have payed the IRS off with what he is charging you.
ETA: I am fairly sure you can handle this online since the amount owed is so small.
Screw the CPA. You could have payed the IRS off with what he is charging you.
ETA: I am fairly sure you can handle this online since the amount owed is so small.
This post was edited on 6/11/14 at 8:40 am
Posted on 6/11/14 at 8:49 am to saderade
deal w/ irs yourself, have cpa prepare letter stating what he sent and when and any evidence if possible... lawyer up against cpa if needed.
Posted on 6/11/14 at 9:06 am to saderade
Did you have any type of billing agreement or engagement letter with the CPA with your signature on it? Was there any up front agreement between you and him on what his billing rates would be? $525 for this initial letter sounds pretty exorbitant, when it probably only took him 30-45 minutes.
And for future reference, always send correspondence to the IRS yourself, and send it certified. They claim they never received stuff all the time. It's a cover for their inefficiency. And keep records of who you talked to with the IRS, and copies of everything you send them.
And for future reference, always send correspondence to the IRS yourself, and send it certified. They claim they never received stuff all the time. It's a cover for their inefficiency. And keep records of who you talked to with the IRS, and copies of everything you send them.
Posted on 6/11/14 at 9:22 am to saderade
That does seem a bit exorbitant. It should have never gotten this far. On the letters themselves, there are fax numbers to which you can send the documentation.
So you were charged $525 + $265 + $450 = $1240 and your bill from the IRS was for around $1000?
I don't know how much time he actually put into it but it sounds like he worked your arse.
And yes...always send things certified to the IRS.
My clients would laugh in my face if I charged those prices. I wouldn't have any after that!
So you were charged $525 + $265 + $450 = $1240 and your bill from the IRS was for around $1000?
I don't know how much time he actually put into it but it sounds like he worked your arse.
And yes...always send things certified to the IRS.
My clients would laugh in my face if I charged those prices. I wouldn't have any after that!
Posted on 6/11/14 at 9:24 am to The Spleen
I don't want to directly pay the IRS because I shouldn't owe them anything. After his first review he said they actually owe me $20 from 2010.
As far as contacting them myself, that has proven to be very difficult. Called on 3 different occasions and was on hold for over 45 minutes each time and only spoke to someone once. That was early on and he said they were still processing everything
As far as contacting them myself, that has proven to be very difficult. Called on 3 different occasions and was on hold for over 45 minutes each time and only spoke to someone once. That was early on and he said they were still processing everything
Posted on 6/11/14 at 9:31 am to saderade
You can always pay and amend the return to get the refund.
Posted on 6/11/14 at 9:42 am to saderade
I call them on behalf of my clients all the time. You have to call them early in the morning. Right now the wait times for practitioners are around 2-5 minutes if you do it before 9 am.
I just called Monday. Easy as pie.
If you pay the tax and try to amend the return for a refund, it may be too late if the return was for 2010. You have 3 years after the date it was filed(including extensions if you filed for one) to receive a refund form an amended return.
However, there is no statute of limitations on money owed to them.
I just called Monday. Easy as pie.
If you pay the tax and try to amend the return for a refund, it may be too late if the return was for 2010. You have 3 years after the date it was filed(including extensions if you filed for one) to receive a refund form an amended return.
However, there is no statute of limitations on money owed to them.
This post was edited on 6/11/14 at 9:49 am
Posted on 6/11/14 at 9:50 am to saderade
First off... this sucks. This is why people have such a low opinion of the IRS. Sadly, your situation is not that uncommon at all.
Is this guy an actual CPA in public practice, or just a company CPA doing side work, or is he a CPA at all?
While I agree his costs remain high, I don't know how much his hourly rate is, what you all agreed to, and how much time he spent handling the situation.
I would not pay the IRS one dime. Call them, yes, wait on hold, and ask them what exactly the status is of information that has been sent to clear the issue.
Another option, depending upon where you live, is to go to one of the Taxpayer Assistance Centers. Plan to spend the day there. Get in line there 30 min before they open, bring with you copies of your tax return, all notices you recieved, and the proof that you have fixing the issue. You will be able to meet with someone in person and hopefully get this thing resolved.
As far as what to do with the other CPA, how much have you actually paid him? If it is all but the $450, I would call him and see if you can pay him part of that. In reality, he's probably not going to sue you for $450. But... you said it's a guy related to your mom's company... so it's a little bit messier.
Sorry you are having to go through this.
Is this guy an actual CPA in public practice, or just a company CPA doing side work, or is he a CPA at all?
While I agree his costs remain high, I don't know how much his hourly rate is, what you all agreed to, and how much time he spent handling the situation.
I would not pay the IRS one dime. Call them, yes, wait on hold, and ask them what exactly the status is of information that has been sent to clear the issue.
Another option, depending upon where you live, is to go to one of the Taxpayer Assistance Centers. Plan to spend the day there. Get in line there 30 min before they open, bring with you copies of your tax return, all notices you recieved, and the proof that you have fixing the issue. You will be able to meet with someone in person and hopefully get this thing resolved.
As far as what to do with the other CPA, how much have you actually paid him? If it is all but the $450, I would call him and see if you can pay him part of that. In reality, he's probably not going to sue you for $450. But... you said it's a guy related to your mom's company... so it's a little bit messier.
Sorry you are having to go through this.
Posted on 6/11/14 at 10:23 am to LSUchuck
quote:
However, there is no statute of limitations on money owed to them.
Due to fraud, correct. However there are limitations and it is something like 5 or 7 years depending on % agi.
Posted on 6/11/14 at 10:38 am to saderade
Overall sounds on the high side, but another way to look at it, the problem is with the IRS not the CPA, he is just charging you for his time and effort. First off he did not do the return initially so he had to fully review the return to see what was going on, secondly the amount you owe the IRS has nothing to do with how much he charges, he works by the hour not by the %
thirdly
do you think he had any better luck? I am sure he has other things to do besides sitting on hold with the IRS
DO you use him now for your yearly stuff? If so I would think a call to him might help, if you are not using him...well that might be part of it too
thirdly
quote:
Called on 3 different occasions and was on hold for over 45 minutes each time and only spoke to someone once.
do you think he had any better luck? I am sure he has other things to do besides sitting on hold with the IRS
DO you use him now for your yearly stuff? If so I would think a call to him might help, if you are not using him...well that might be part of it too
This post was edited on 6/11/14 at 10:45 am
Posted on 6/11/14 at 11:06 am to reb13
Well, technically it is 10 years but most people don't make it that far. They usually get their money. You can always try an Offer In Compromise. An OIC is generally not accepted if the IRS believes you can pay the amount owed in full or by a payment agreement.
Posted on 6/11/14 at 1:41 pm to saderade
Your dispute with the IRS shouldn't be difficult to resolve one way or another. Either you can provide documentation that substantiates your 2010 return, or you can't. You should be able to clear it up with a phone call and a follow up letter or fax.
Your dispute with the CPA is a different matter. Attempt to negotiate a reduction to what you think it is fair you pay him. Let him know you are considering referring the matter to the IRS Office of Professional Responsibility.
Your dispute with the CPA is a different matter. Attempt to negotiate a reduction to what you think it is fair you pay him. Let him know you are considering referring the matter to the IRS Office of Professional Responsibility.
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