Providing information to third parties

[BHoffman]

Partnership client wants me to directly provide information requested by a third party.  The third party is some sort of consultant.  He's asking for financial statements and tax returns, along with projections and some other stuff.

I'm uncomfortable with providing services to someone who is not my client.  

The client says to give the guy whatever he asks for.  I've not discussed billing for the services this guy is asking me to provide yet, but I left a message for one of the partners (who is kind of in charge) to call me.

Any thoughts?  I plan to discuss with the partner the personal information that will show up in the tax returns on the K-1 forms and will suggest that those forms not be included.

Thanks!

 

 

[Lee B]

At the very least you need a broadly worded signed Financial Disclosure Authorization Form.

If you are still uncomfortable, provide all the information to your client and let him pass it on to the third party.

I had a similar situation years ago, where one of my clients was sold on a Consulting Engagement to improve

his profits. The third party had their own authorization form which my client signed.

I provided the information. Turned out to be a total waste of the $ 5,000 my client paid.
 

 

[BHoffman]

I found a nice client consent form on the interwebs. This partnership has one partner who is a genius at marketing but a dud when it comes to accounting or taxes. The other partner is an whiz kid with numbers. I usually deal with the whiz kid.  Hoping he will tell me to just ignore the third party requests and he will deal with the genius marketer who is hanging all over this mysterious, exotic, handsome financial advisor guy.  And I'm out of single malt .  

[taxxcpa]

I email it all to the client and tell them they can forward it

 

[Lion EA]

I upload to FileShare on my website TO MY CLIENT and NOT to a third party for client to do whatever they want.  With a partnership, I would direct the upload to the tax matters person and let your requester know he can get everything from his tax matters partner.  I would give the tax matters partner a written estimate of the additional services requested and wait for a signed authorization to begin.  (Maybe even wait for payment in advance now that it's tax season and I have other things to do.)  This could all go away by the time you prepare projections, etc., and you won't get paid for your time!

[Catherine]

Never, ever, EVER give info to a third party without a properly signed Section 7216 disclosure authorization.  There are TIGTA rules on paper size, font and font size, wording, etc.  But acceptable samples are available online.  Without that letter, I won't even confirm to a third party that the client IS my client.  

But easiest by far is to give it all to the client; then it's their lookout.  Yes, if it's extra work for you, get paid up front.  If they do need you to send (you have a fax that will handle 50 pages and they don't, for example), get that signed letter first.

[Jack from Ohio]

1 hour ago, Catherine said:

Never, ever, EVER give info to a third party without a properly signed Section 7216 disclosure authorization.  There are TIGTA rules on paper size, font and font size, wording, etc.  But acceptable samples are available online.  Without that letter, I won't even confirm to a third party that the client IS my client.  

But easiest by far is to give it all to the client; then it's their lookout.  Yes, if it's extra work for you, get paid up front.  If they do need you to send (you have a fax that will handle 50 pages and they don't, for example), get that signed letter first.

Disagree!!!

Never, ever, EVER give info to a third party is my policy.  Period.

[Medlin Software, Dennis]

I go with deal only with the customer who I can charge, or who has already paid me.  The one exception is a court order.  Dealing with a third party will cost me money (at the least).

I have many messages (when I did not ask who I am responding to) of a computer "expert" who was trying to help someone.  Rarely ended well.  The third party can always hang me out for the expert's cost, for the failure to fix, for the delay in fixing, etc.  The most common is when an "expert" re-formats a drive, then asks me how to get data (which they failed to backup before the reformat).  If I an not speaking directly with my customer, I have no way of controlling what the customer is told, and I have not seen a case where the the "expert" took responsibility.

 

[JohnH]

These days, with email and texting capability, there's no reason to give info to a third party (with the possible exception of a valid subpoena). Email a password protected file toe the client and let them do whatever they wish with it.

I have never yet seen a situation in which a third party had a valid reason for obtaining info directly from me.  Not that they haven't tried.  I've had a couple of bankers to offer silly excuses for getting info from me,, but I risked losing the client rather than cave in.  

[Medlin Software, Dennis]

There are still lenders who want pay stubs and statements from employers, although neither does anything for the employer or employee.  Lenders do not really "count" stubs, statements, or phone calls from employers. They are just collecting as much as they can.  If the loan goes bad, they have a larger pool to try to collect from.  I suggest employers say nothing without a court order.  Employees have bank statements and tax returns to prove income.  If an employee begs and pleads for some statement from an employer, the employer could say the employee has been working since X, and there are no pending dismissal actions.  I would not speculate about tomorrow, unless the employee is under contract.  I imagine similar gets asked from tax preparers, how long have you been doing the return, do the numbers match, etc.

[David W Ristau CPA]

On 1/11/2017 at 11:33 AM, Jack from Ohio said:

Disagree!!!

Never, ever, EVER give info to a third party is my policy.  Period.

My policy for 20 years:

"We follow a strict policy of non-disclosure:

We do not directly disclose ANY information about you to ANYONE.

ALL information related to you as our client is released only to you.

Once any information leaves our office we have no control over the information and thus will not be able to guarantee your privacy or security.

ANY verbal or written request from a client to release documents directly to a bank, mortgage company or your lawyer will not be honored. "