joelgilb Posted September 18, 2008 Report Share Posted September 18, 2008 I have a client that is going bankrupt and needs me to prepare their 2007 tax returns (corp and indiv). In order to get paid, therefore (under the BK rules my fee is discharged also, even if I am not listed - Please no comments on this issue as I am a former BK attorney and am sure of this) I need to collect my fees either with for the 2007 tax returns or up front. Obviously if they are going bankrupt they can not pay up front. I have not setup RAL or Fee collect and ATX and the Santa Barbra bank will not set me up for 2007. I was wondering if I could use form 8888 to have a portion of the fee deposited to my bank to cover my fees. I can also have them sign an agreement direct with me allowing the transfer to my account to pay my fees. My only concern is if there is some law or breach that would cause me concern down the road. thx Joel Quote Link to comment Share on other sites More sharing options...
MAMalody Posted September 18, 2008 Report Share Posted September 18, 2008 The Form 8888 instructions say: "You cannot request a deposit of your refund to an account that is not in your name (such as your tax preparer's account)." Mike Quote Link to comment Share on other sites More sharing options...
Don in Upstate NY Posted September 19, 2008 Report Share Posted September 19, 2008 Plus Circular 230 prohibits it ... § 10.31 Negotiation of taxpayer checks. A practitioner who prepares tax returns may not endorse or otherwise negotiate any check issued to a client by the government in respect of a Federal tax liability. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted September 19, 2008 Report Share Posted September 19, 2008 Just a shot in the dark - I am not sure this will work. Couldn't you contact the BK attorney and work for him? He could pay you, as he needs this done for his client to complete the BK, and I think the BK attorney bill will not get discharged. If the BK attorney adds your fee to his and he pays you, wouldn't that work out for everyone? Again, I have not run into this, so I am just throwing this out for discussion. And depositing your fee into your account is prohibited by Cir. 230 as mentioned above. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
jainen Posted September 19, 2008 Report Share Posted September 19, 2008 >>I need to collect my fees either with for the 2007 tax returns or up front<< I think you should do this one pro bono. The poor guy has enough problems already. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted September 20, 2008 Report Share Posted September 20, 2008 I'd just suggest that the up-front payment may not be impossible, if they really want the protection of the BK court. Because under current rules, they can NOT file without the tax returns, if you insist on payment up front, they will either pay you or go elsewhere. If you don't wish to do this pro bono, either way is in your favor, either you get paid or you save your time for something more enjoyable than doing a free tax return. Especially since those sort of returns are often messy. Quote Link to comment Share on other sites More sharing options...
joelgilb Posted September 23, 2008 Author Report Share Posted September 23, 2008 Thx All. I was pretty sure that this was prohibited, but couldn't find any source that indicated that. As for the BK attorney, he is less than cooperative on my behalf. I did however find out that ATX was incorrect on me being setup for fee collect. Contacted the Santa Barbara Bank and they had an account already setup for me. Since I never used it I didn't remember setting it up. Would have thought when I called ATX they would have had it on file to tell me the correct answer. So problem solved Thx again Quote Link to comment Share on other sites More sharing options...
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