schirallicpa Posted September 20, 2022 Report Share Posted September 20, 2022 I have been doing a corp tax return for a couple that own a business for over 10 years. The husband is 100% shareholder. The husband has been listed as pres, and the wife as VP ever since the 1125E was added. She has always signed as VP. I do not have the copies of the articles of incorporation nor do I have any amendments. I have their word on who's who. Now I am being asked to provide the paperwork I have regarding the wife being the VP. I don't have anything. Am I supposed to audit officer status when I take on a new client? Am I supposed to have legal documents? The lawyer is now saying that I am reporting inappropriately because the wife was never set up as an officer. What? She's the one running the business. 1 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted September 20, 2022 Report Share Posted September 20, 2022 Sorry! Quote Link to comment Share on other sites More sharing options...
jklcpa Posted September 20, 2022 Report Share Posted September 20, 2022 15 minutes ago, schirallicpa said: I have been doing a corp tax return for a couple that own a business for over 10 years. The husband is 100% shareholder. The husband has been listed as pres, and the wife as VP ever since the 1125E was added. She has always signed as VP. I do not have the copies of the articles of incorporation nor do I have any amendments. I have their word on who's who. Now I am being asked to provide the paperwork I have regarding the wife being the VP. I don't have anything. Am I supposed to audit officer status when I take on a new client? Am I supposed to have legal documents? The lawyer is now saying that I am reporting inappropriately because the wife was never set up as an officer. What? She's the one running the business. Does your state have any other filings where officers of the corp are listed? My state has an annual franchise tax for corps filed with the Sec Of State to keep the corp in good standing and that allows it to operate legally as a DE corp. That filing requires the officers be entered. Anything like that with St of NY that you could ascertain? You might try googling to see what comes up and if officers are listed. Also check LinkedIn for wife's profile to see how she lists herself 3 Quote Link to comment Share on other sites More sharing options...
Lee B Posted September 20, 2022 Report Share Posted September 20, 2022 Interesting, if I have new clients with copies of prior years tax returns with different last names, should I ask for proof of marriage? 2 Quote Link to comment Share on other sites More sharing options...
Lee B Posted September 20, 2022 Report Share Posted September 20, 2022 1 hour ago, jklcpa said: Does your state have any other filings where officers of the corp are listed? My state has an annual franchise tax for corps filed with the Sec Of State to keep the corp in good standing and that allows it to operate legally as a DE corp. That filing requires the officers be entered. Anything like that with St of NY that you could ascertain? You might try googling to see what comes up and if officers are listed. Also check LinkedIn for wife's profile to see how she lists herself My state has a Business Registration Search Lookup function which I use for any new business entity clients. It shows all of the relevant information. However, just because someone's name shows up here doesn't mean that all of the legal requirements have been meet. Are there Board of Director's Minutes confirming who the Officer's are? I suspect most of us assume that our clients are telling us the truth, unless something obvious smacks us in the face! 3 Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted September 20, 2022 Report Share Posted September 20, 2022 Look up the companies annual report in your home state website (secretary of state) and send them a copy of the annual report. 1 Quote Link to comment Share on other sites More sharing options...
Medlin Software, Dennis Posted September 20, 2022 Report Share Posted September 20, 2022 Part of the "it has to be the responsibility of someone else" movement (replaced now uncommon sense and self responsibility). If a community property state, that may be a deflection item to look at if needed. But, being asked for something may not correlate with what you are obligated to provide based on the scope of your engagement... so don't respond to fishing expeditions. Unless it comes from someone who engaged you and is within scope, or a court, it goes in the bin (same as reference letters, lender requests, etc.). Run it by your legal representative if you need to get their E&O policy involved (for acting on their advice). I anticipate truth, but verify when needed. Even truthful people may look for recovery if your pockets are deeper. 3 Quote Link to comment Share on other sites More sharing options...
Lee B Posted September 20, 2022 Report Share Posted September 20, 2022 1 hour ago, ILLMAS said: Look up the companies annual report in your home state website (secretary of state) and send them a copy of the annual report. Unfortunately, the annual report only reflects what was filed by the person filing the report. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted September 20, 2022 Report Share Posted September 20, 2022 4 hours ago, schirallicpa said: Am I supposed to have legal documents? I download all available articles of incorporation or organization and any subsequent filings from the state websites, if available. Fortunately, Maryland has a great website for this and most of my clients are in Maryland, but I have had some luck downloading from other states. Also, husband and wife are considered as one for taxes as they relate to stock or partnership holdings, whether the holdings are in their joint names or not. And an officer is an assigned roll, not an ownership roll. Anyone can be named an officer and you were doing that. The lawyer's being a real jerk. 3 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted September 20, 2022 Report Share Posted September 20, 2022 1 hour ago, cbslee said: Unfortunately, the annual report only reflects what was filed by the person filing the report. Maryland only requires officers to be listed for corporations. LLCs are not required to list owners or officers. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted September 20, 2022 Report Share Posted September 20, 2022 5 hours ago, schirallicpa said: Now I am being asked to provide the paperwork I have regarding the wife being the VP Your client is not the spouse's lawyer, your client is the corporation that you prepare the tax return for. If the lawyer is alleging that his client is not an officer of the corporation, then she is not entitled to provide authorization for you to talk to a lawyer outside of the corp, nor divulge anything about the corp to him. Thank him for informing you that his client has committed tax fraud by knowingly signing a tax return that has a material misstatement made by her, and that you will be informing the IRS of his communication to you...(maybe that is going a little too far to call the IRS on her - your call). Tell him to get a subpoena if he wants to depose you. Tom Longview, TX 6 1 Quote Link to comment Share on other sites More sharing options...
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