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Received a subpoena today! Some guy is suing my client over some profit sharing thing over this one construction job. I have to submit (by mail) to the plaintiff's attorney the financials, my invoices to the client, and some job costing work papers. I sent a copy of the subpoena to my client and yelled at him over the phone that I did not appreciate being hauled into his mess. On the advice of my attorney, I told him if he wanted to object to the subpoena then he would have to pay his lawyer to do that. Otherwise I would be complying and sending off the requested documents. I also spoke to the plaintiff attorney and asked why he wanted my invoices. He said to see how much of my fees were allocated to that job. None. He was pretty nice and assured me that I wasn't under any threat. My attorney assured me of same. I am just livid.

Ordered a large pizza and huge antipasto salad. Going to binge watch Buffy the Vampire Slayer on Netflix and stay up real late. Digging around for most comfy jammies. Turning AC down to about 60 and resurrecting soft lap blankie. Hate everything right now. Practically sucking my thumb at this juncture. Dealing with a new computer and the pleasure of Win10, hubby out of town, and now this annoying subpoena. Thanks for listening. See, it's times like this when a nice soft cat purring in your lap just solves everything.

I spend quite some time educating my clients, especially the business clients. They know all about their profit and loss reports, and I show them the M-1 as where their books, that they understand to the penny, meet their tax return - which loses its mystery once they are shown the "book to tax" adjustments. I think a big problem with crappy tax preparers might start with them taking on more decision making than is even remotely wise. Clients don't pay us to make their decisions, they pay us to explain and ask the right questions. We really should charge more money

Thanks for the helpful link! I believe I am following the suggestions. I prepared the info listed in exhibit A and will send copies to the client. I have to respond to a valid subpoena and am not commiting any breach of confidentiality, right? I did confer with my attorney. He said this was no big deal. I'll probably get in touch with my E&O insurance provider on Monday. I can't figure out how the plaintiff attorney even got my contact info. He said he received nothing in the way of financial statements from the client. I don't think there is any public record. Hmmmm. Oh well.

http://www.journalofaccountancy.com/issues/2013/feb/20126773.html

Tax owed and SRP are billed separately. I don't believe SRP is part of the transcript.

Yes, $500k is allowed as long as the other requirements are met and they file a joint return, only one of them needs to own the residence. See 121(b )(2)(A)(i)

Forgot to mention that the prior accountants for the partnership never recorded their changes in the client's data file, so their books are incomplete. Let's hope they don't get audited for any of those years. I always record the changes in the client's books and give them a pdf of the GL along with the tax return. I think it's my job to make sure the client's books are complete and accurate.

I used to think the IRS came down too hard on us. At some seminars IRS liaisons treat us like partners, but others act like we're lazy idiots. (And then there was Karen Hawkins, who thought we were all criminals.) Gee, most of the tax pros I know spend inordinate amounts of time trying to determine correct basis, whether a household member really qualifies as a dependent, whether a client truly qualifies for a credit or a penalty abatement. Yet if you read the tax fraud blotters and the criminal proceedings published by Accounting Today every week, you wouldn't believe what goes on in the world of paid tax prep. These sources provide endless lists of preparers accused/convicted/imprisoned/enjoined for all sorts of crimes against clients and the US gov't. Paid preparers convicted of identity theft, of borrowing dependents from one client to put on another's return, making up income and expenses and donations and other deductions, filing returns for unwitting Puerto Rico residents who have SS#s but don't have to file in the US, giving clients a copy of their return and then changing and submitting it (with the extra refund going into the preparer's account), having all the client's refund going into their own account, it goes on and on. Unlike the errors Abby shared, and the many we see in our practices every day, these acts are not due to ignorance or sloppiness but to an intent to commit fraud and steal from individual taxpayers and/or all US taxpayers. Regulation could help curb the errors made out of incompetence because tax pros will have to know more to be allowed to prepare returns. (We will all still make mistakes--it's unavoidable given the complexity of the tax code and how very much there is to know--but stuff like ignoring depreciation and letting noncustodial parents claim dependents "because they pay child support" won't happen as much.) Those who intentionally break the law, however, aren't going to be held back by a few silly regs they won't care about. Catherine is right that the IRS wants us to do their audit work. Maybe it's also up to us to report fraud when we see it. Not ignorance, but intentional cheating.

Yes, actually meant "export". Every time I make a major change in a return, I export it to the file in the jump drive. When return is finished, entire return is once again exported. Then, if I wish or need to work on a different computer, return can be imported into the Return Manager. I really don't worry about the Save feature, because I have saved (exported) a copy that I can carry around and/or keep in a safe place away from the computer program.