BLACK BART Posted February 7, 2017 Report Share Posted February 7, 2017 If only some kind soul would show up here and present me with just an ordinary "gray/either-way" ethical tax problem. That way I could at least entertain the possibility of solving it, acquiring, and retaining a steady client. Nicest folks for quick $75 "short forms" are late-50ish people, computer-shy (think Turbo-Tax is a washing machine), don't know anything about taxes and aren't likely to, maybe with grand-kids (raising them nowadays, of course) which will run the fee up to $95-$115. Anyway, a Prospective Client (in this category, but no kids) showed up Friday. Said he was single; gave me his docs (two W-2s, small pension, bank interest) which I plug in the computer and give him the refund amount. After a pleasant 20 minute chat I told him to come back in three day; he starts to leave, turns around, and says: PC: Oh, it don't really matter, but I guess I'm supposed to tell you - I sold a house last year. BB: Your house? Your personal residence? PC: Naw, my uncle died and left me his old, fallin'-down rent house. It wasn't worth but $10,000. BB: Oh, well, uh; we have to put that down. PC: No, no, it's okay. See, I let this guy have it for just what my uncle owed the bank on it. I put it on a land contract between him and me. BB: Well, we still have to.... PC: No, you don't understand. He cain't pay for it all at once, so I'm helpin' him out. He pays me exactly what the bank payment is ever' month and I turn around and give it to them until the $20,000 note gets paid off. I never get no money to keep and so I don't make nothin' off the deal. Failing to grasp this irrefutable logic exasperated him. He guessed he'd have to go somewhere else where they knew more about taxes. And out the door he went. 7 Quote Link to comment Share on other sites More sharing options...
rfassett Posted February 7, 2017 Report Share Posted February 7, 2017 Musing: Nice uncle. PC should have disclaimed the inheritance and let the bank have the property - or the estate sell the property to pay off the loan. I may have asked him to set another appointment with me where I could do some educating. This guy probably would not have darkened my doorway because the fee you quoted is way below the minimum fee I charge just to walk though my door. So how stupid do these PC's think we are? PC accepted the property that was upside down with financing. A buyer is found that is OK with paying twice as much as the property is worth? The PC may be correct - that he is making "nothin' off the deal" (as presented), but that does not excuse the reporting requirement. The PC must realize there is some sort of reporting requirement - why else would he bring it up? Those are just my musing this early Tuesday morning. 3 Quote Link to comment Share on other sites More sharing options...
JohnH Posted February 7, 2017 Report Share Posted February 7, 2017 I agree. That was anything BUT an "Oh, by the way" comment. If it had been truly innocent, he would have taken your advice. Bart, the client was clearly making a feeble, amateurish attempt to tag you with some responsibility if the issue ever came up in an audit. The first thing out of his mouth would have been "I told the preparer about it, and he said it was OK to ignore it." Then he would have been harassing you to pay any penalties & interest (maybe even the tax liability itself - some people are funny that way). I can't help but wonder if he had already visited another preparer, received the exact same advice, and so you were his next stop. Eventually he will figure out that the only way to get away with this is to just not mention it. But even then, it's likely he will try to shift blame if he's ever audited. I feel sorry for the last preparer in the chain - you should be glad you're not that person. Sometimes the most profitable thing to happen in a business relationship is when they take their business elsewhere. 9 Quote Link to comment Share on other sites More sharing options...
RitaB Posted February 7, 2017 Report Share Posted February 7, 2017 I don't know why people think we are here to help them cheat. But many of them do, and they manage to find a Loophole Lefty down the road a ways. Oh well, we are the cat's pajamas for waving good bye to these "taxpayers". 8 Quote Link to comment Share on other sites More sharing options...
BLACK BART Posted February 7, 2017 Author Report Share Posted February 7, 2017 Actually I'm not real sure that "land contract" between him and the person he's "helping out" doesn't last several years beyond the life of that bank note (possibly at a higher interest rate) or could be there was some unmentioned cash down. But, that aside, while one or both of these guys may have a wire down, it's nothing new for me to hear that argument about "no cash - no gain" when someone's getting a debt paid off for them. Many people can't seem to grasp the concept. Nobody else ever heard that? Re the AR fee, rfassett - we have to charge what the traffic will bear so as not to bare the bank account. If I jack my fees up to your PA rates, they'd consider it gouging and nobody would walk through the doorway which would remain permanently darkened. 4 Quote Link to comment Share on other sites More sharing options...
RitaB Posted February 7, 2017 Report Share Posted February 7, 2017 7 minutes ago, BLACK BART said: But, that aside, while one or both of these guys may have a wire down, it's nothing new for me to hear that argument about "no cash - no gain" when someone's getting a debt paid off for them. Many people can't seem to grasp the concept. Nobody else ever heard that? Yeah, every single person that ever sold real estate in this town thinks that. Every. Single. One. 7 Quote Link to comment Share on other sites More sharing options...
rfassett Posted February 7, 2017 Report Share Posted February 7, 2017 15 minutes ago, BLACK BART said: Re the AR fee, rfassett - we have to charge what the traffic will bear so as not to bare the bank account. If I jack my fees up to your PA rates, they'd consider it gouging and nobody would walk through the doorway which would remain permanently darkened. Just to be sure we all understand each other, I am well aware that fees differ somewhat from area to area. But I will state this - I am in Podunk USA - population 5,500, with the nearest "big" town (pop 20,000) twenty minutes away, and the next "bigger" town (pop 105,000) an hour away. My clients would have a lot of choices to go elsewhere. We have the big box places in town, other professional offices, etc. My point is - don't sell yourself short. And I also recognize that not all are in my position. I have been doing this for more years than I care to count. And my plate is always full. I would wish the same for all of us. 3 Quote Link to comment Share on other sites More sharing options...
RitaB Posted February 7, 2017 Report Share Posted February 7, 2017 7 hours ago, rfassett said: This guy probably would not have darkened my doorway because the fee you quoted is way below the minimum fee I charge just to walk though my door. I don't charge em to walk thru the door, but there's a couple I would pay to leave... 7 Quote Link to comment Share on other sites More sharing options...
BLACK BART Posted February 7, 2017 Author Report Share Posted February 7, 2017 1 hour ago, RitaB said: I don't charge em to walk thru the door, but there's a couple I would pay to leave... Ha-ha. Reminds me of a joke (think I already told it here, but it's worth telling again). I once had a doctor client and he overheard me complaining about a PITA client who'd just stormed out of my office. Doc said the guy was also his patient and "I'd like to refer him to Dr. Kevorkian!" 3 Quote Link to comment Share on other sites More sharing options...
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