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client stiffed me - now what?


schirallicpa

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I have known the Taxpayer forever, and he is a bit of a friend to my husband now.  He is on his third wife, and she is really something else.  She brought their stuff in in late Jan, and also need a single page "financial statement" of sorts for other reasons.  We did that, and we did the tax return.  They are farmers.  In NYS you get a refund of your school tax paid in, so that's always a nice chuck of change for them.  However, they had a liability to the Feds this year, which is usually a refund.  ( they have a bunch of kids, and usually get EIC, one of my few clients in that area.)  So - she was all pissed off and gave her piece of mind to my secretary (I wasn't here) and marched out of the office without her tax return and without her financial statement, but with her box of papers.  (oh, did I mention that we spend a good 4-5 hours tallying up their crap?).  Anyway - tried to leave many many voicemails, and to no avail.  Sent a bill for collections and got a message back on my machine that thanks for past services - they went to someone else.  My bill to them was in the neighborhood of $1000 for the time, the return, and the financial statement.  

Not sure how to handle it.

:angry::(:wacko:

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I don't know about New York, but in my state you could take them to Small Claims Court without an attorney and win this case plus all fees hands down.

You would receive a judgement and then you would have find property or a bank account to levy.

It would take some time and effort, but for this client I would absolutely go for it.

 

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This is the reason I do not give information or tax returns to the client until I get my pay.  I made this policy across the board to all my clients.  It is included in my annual letter.  

You now know what kind of person they are and a different definition of "friend."  It is worth the $1,000 for the information you just learned.

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Rock and a hard place, Jack.  ES didn't give the worman any work product, and is required to give back the original documents, if asked.  It is an ethical violation for CPAs to hostage a client's original records for a fee.

ES, I'd let it go and never do business for this family again. Others here have laid out the path if you decide to try to collect, but I think you may rack up more in aggravation that it may be worth. 

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I have had some small success in refusing to provide information to a *new* accountant until I have been paid.  And one client contacted me after several years needing some crucial document and hoping I had a copy.  I did - but would not look for it (anything that old was in deep storage) until she paid up.  Paypal payment within the hour, and I found her stuff that evening.  We were both thrilled.

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17 hours ago, Jack from Ohio said:

This is the reason I do not give information or tax returns to the client until I get my pay.  I made this policy across the board to all my clients.  It is included in my annual letter.  

You now know what kind of person they are and a different definition of "friend."  It is worth the $1,000 for the information you just learned.

I KNOW!!! And my secretary gave her the box, she sat it on the table behind her in the reception area.  Then my secretary got out the tax return and was reviewing it with her.  When she heard she owed money, she started bipping at her and then took her box and left.  And I will tell you, usually my secretary is very very good at keeping stuff back and demanding payment, but she slipped up that time.  (partly because the box was kinda gross and she was just wanting to get it out of here, I think.........)  Anyway - yes - keeping their stuff is what should have happened.

 

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17 hours ago, jklcpa said:

Rock and a hard place, Jack.  ES didn't give the worman any work product, and is required to give back the original documents, if asked.  It is an ethical violation for CPAs to hostage a client's original records for a fee.

ES, I'd let it go and never do business for this family again. Others here have laid out the path if you decide to try to collect, but I think you may rack up more in aggravation that it may be worth. 

in regard to ethical violation, eventually, i agree that stuff would be returned.  however, at that initial confrontation, we should have held it.  I would have.  And then if she demanded it, we would have turned it over.  but I think she would have stormed out empty-handed had she not already been given the box, and then she would have had to come back.  And then she may have decided to pay.  However, with all her goodies in hand she went straight to HR or similar and then they did the return. (apparently she took out her ledger showing the additional income.)  But the return would be incorrect, regardless, because no one asked for the depreciation.  Oh well.  I just have to not care.  

grumble mumble.....grumble mumble.....

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Don't know if this in any way eases the pain, but here's my experience.  Over the years, I've had one or two ex-clients whom I would have gladly PAID someone $1,000 to insure I never heard from them again. One situation did involve a new wife who obviously knew more about this business than I did (at least according to her). 

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This really sucks, but life is too short for the aggravation that you will go through trying to collect.  If they never come back, you don't have to look back.  If they do come back with a pile of crap for you to fix, then you will get your money then, with interest.

Like I said, it sucks.

 

Tom
Newark, CA

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2 hours ago, JJStephens said:

Hey, JohnH. Next time you want to pay someone $1000 to take a client, I'll do it! In fact, I'll take a couple of them! ^_^

As I'm recalling the situations I refer to, you'd be returning the money within less than 1 year.

Or paying another tax preparer to do what you did for me.  

Trust me.

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