providing joint tax returns to banks or other institutions

[schirallicpa]

I'm running into this more and more.  One party of the return will ask that I provide a copy of the return to a bank, and the other party will not provide consent.  It's putting me in a bit of a hard spot.  

In the latest case, the husband claims since it's a joint return, he owns it as much as the wife does and should be able to share with whomever he wants.  The wife does not want him to share. I have a bank requesting the return for a loan approval.  

What type of procedures do other firms have in place when asked for copies of returns. (Yes - of course they were given their own copies, but of course they cannot find them and I got dragged into this.)

 

[Elrod]

I would always give them another copy to give to the bank themselves.

Never, would I give a client tax return to anyone other than the client.

[Catherine]

I provide NOTHING to banks.  The pushiest one once called me directly and I told the woman that without a signed Section 7216 disclosure I could not even confirm or deny that the person was my client.  Gave her all the details on how to get one to me and she went away never to be heard from again.

The best you can do is give another copy to the client -- or tell them to go look for the one you already gave them.  However, at the point you give a new copy to the husband you are picking which client you keep in the conflict of interest case they stuck on you.  

[Jack from Ohio]

I totally agree with both Elrod and Catherine.  You put yourself in huge exposure to liability if you send information to a third party.

We do NOT send taxpayer information to anyone except the taxpayer(s).  They are then responsible for anything after that.

Read Circular 230 again...

Charge for extra copies!!

[schirallicpa]

clients are such a PITA.  If only we could do this work without them.

[Lion EA]

I will give a copy to a client to do with what they want.  If joint, I will give a copy to either of the spouses who signed it.  Let them argue with each other instead of me!

I too had a pushy bank call me to say that I (and I think he yelled the word "you" at me) was losing my client a low mortgage rate by not emailing the bank a return copy or comfort letter that very day; then the client, who is a lawyer, called to say he'd sue me.  Of course, the bank and my client had been working on the mortgage for weeks and could've called me soon enough for the client to receive a copy to use.

[Abby Normal]

I email it to the client (password protected) and let them forward it to the bank. No charge.

[Catherine]

1 hour ago, jmdaviscpa said:

I email it to the client (password protected) and let them forward it to the bank. No charge.

File share portal for me.  If they want paper, it's a $30 up-front charge to print and mail to the client and NO ONE ELSE.  Once the client has it, for all I care they can make paper airplanes with it or burn it to send smoke signals.  It's theirs.

[Lion EA]

Yeah, I upload to FileShare.

[Elrod]

[JohnH]

I agree with what has been said.  

There is absolutely no reason to provide a copy of a return to a third party. Period.

Give it to the client either in paper or electronic form (or both).  They can then do whatever they wish with it. Our involvement in the process is useless insofar as the loan is concerned, and potentially risky insofar as we are concerned.

[kcjenkins]

And it is not 'choosing between the spouses', because either one of them has the right to request a copy of their return.  

[jklcpa]

21 hours ago, schirallicpa said:

In the latest case, the husband claims since it's a joint return, he owns it as much as the wife does and should be able to share with whomever he wants.  The wife does not want him to share. I have a bank requesting the return for a loan approval.  

 

 

Both are parties to the return and you can provide a copy of the return to either one of them without choosing sides, and its ultimate disposition is up to them.  You could smooth this over with the wife by telling them that the bank will almost certainly require them to sign Form 4506-T as part of the loan application, so the bank will have access to the tax transcript anyway.

[Catherine]

5 hours ago, kcjenkins said:

And it is not 'choosing between the spouses', because either one of them has the right to request a copy of their return.  

In general I agree but if the wife is dead-set against this (even after the 4506-T explanation), you will rapidly find yourself persona non grata and she will refuse to provide new tax documents the following year.  So you will either lose both clients, or have picked the one to remain your client post-divorce.  Yes, we all know clients can be that unreasonable, and it is way easier to blame the tax preparer (or other professional) rather than duke it out with the spouse.

[Lion EA]

I've told some to call his/her divorce lawyer about what to provide, or their lawyer doing the closing on the mortgage about what is required.  They seem to listen to the lawyer that they pay more than me!

[kcjenkins]

6 hours ago, Catherine said:

In general I agree but if the wife is dead-set against this (even after the 4506-T explanation), you will rapidly find yourself persona non grata and she will refuse to provide new tax documents the following year.  So you will either lose both clients, or have picked the one to remain your client post-divorce.  Yes, we all know clients can be that unreasonable, and it is way easier to blame the tax preparer (or other professional) rather than duke it out with the spouse.

Well, I think that's just out of our control, because they BOTH own the joint return, so they both have a RIGHT to a copy of it.   And anyway, if they are fighting now about money, odds are you are going to lose one of them anyway, when they split up, or at least decide to file MFS.