I just don't have the nerve to be a CPA

[BulldogTom]

The company I work for hires a CPA firm to prepare the corp tax return. Per the owner's instructions, all issues related to the tax return go through the CPA firm.

After filing of last year's tax return, we get an FTB notice for underpayment of estimated taxes. FTB wants $1,100. I call the CPA firm and forward the notice. They tell me we should not have to pay and they will take care of it. The preparer of our return just left out the form on the return. Don't worry about it they tell me, it will be taken care of in no time. Six months later, it still is not fixed. FTB is still saying there is a penalty for underpayment.

So what comes in the mail today ----

you are going to love this-----

a bill from the CPA firm for $1,500 for their attempt at correcting the return they screwed up that resulted in an $1,100 penalty.

I could never be a CPA. They have balls of steel and will steal from God or Satan.

Tom

Lodi, CA

[ChrisCPA]

Tom,

While I can see your frustration your attack on CPA's in general is not warranted. I am sure I could find problems with all types of preparers....licensed or not. Don't let a situation like that prevent you from becoming a CPA. There are generally more good that bad.

[MAMalody]

I assume you are going to contest the bill?

[BulldogTom]

I assume you are going to contest the bill?

The owner is going to call the partner.

[jainen]

>>I could never be a CPA<<

I wasn't thinking about it, but if they can pull in that kind of fee I'll have to reconsider. Now, it does seem perfectly reasonable to me. If they had been able to get the fix quickly, the cost would be minimal. But since they had to keep arguing with FTB for many months, naturally it ran up a bigger bill. What form was it, by the way?

[rfassett]

I could never be a CPA. They have balls of steel and will steal from God or Satan.

Tom

Lodi, CA

I take offense to that comment.

[BulldogTom]

>>What form was it, by the way?<<

Form 5806 Underpayment of Estimated Tax by Corporations

>>I take offense to that comment.<<

I appologize.

[jainen]

>>Form 5806 Underpayment of Estimated Tax<<

One more question: When they said they left the form out, did they mean they should have annualized income to eliminate the penalty, or they just forgot to calculate the penalty that was due anyway but could at least have been paid when the return was filed so you wouldn't get the nasty letter?

[BulldogTom]

>>Form 5806 Underpayment of Estimated Tax<<

One more question: When they said they left the form out, did they mean they should have annualized income to eliminate the penalty, or they just forgot to calculate the penalty that was due anyway but could at least have been paid when the return was filed so you wouldn't get the nasty letter?

They forgot to complete the form to eliminate the penalty. All estimated taxes were paid on time.

[jainen]

>>All estimated taxes were paid on time. <<

It sounds simple enough. But the owner wants his CPA to handle it, so let him sign the checks.

[RoyDaleOne]

From Bulldog Tom... lol

Balls of steel, and steal from God and Satan.

You steal from thoses that got.... or wait you tax the rich, because they have the money.

Taxing the poor is a losing battle, or at least a no money game.

You bill twice what you are willing to take; if the client pays, you are super fine, if you cut the bill in half, and the client pays, you are still fine.

Clank, clank.....

[taxxcpa]

You can't blame us poor, low-fee CPAs. Some of the larger firms have a bunch of non-CPA clerical people doing the billing and a lot of the grunt work as well as some of the routine accounting work.

I picked up a client from one of the biggest local firms because the big firm kept making errors since the CPAs in the firm were working on the big stuff like audits of publicly traded companies.

[OldJack]

>>a bill from the CPA firm for $1,500 for their attempt at correcting the return they screwed up that resulted in an $1,100 penalty.<<

It sounds to me like the screw up was probably the client not making estimated payments in the proper amount or on time. In many cases the CPA does not even know if the payments were made on time or if a form 2220 or 2210 is needed. Its easy to blame someone else for your own mistakes. As a CPA I also find the original post outrageous and offensive. :angry:

[BulldogTom]

>>a bill from the CPA firm for $1,500 for their attempt at correcting the return they screwed up that resulted in an $1,100 penalty.<<

It sounds to me like the screw up was probably the client not making estimated payments in the proper amount or on time. In many cases the CPA does not even know if the payments were made on time or if a form 2220 or 2210 is needed. Its easy to blame someone else for your own mistakes. As a CPA I also find the original post outrageous and offensive.

Your assumption is that I screwed up the payments. Wrong. I made every payment on time. I followed the CPA's written instructions. I showed them copies of every EFTPS payment and backed it up with the copy of the bank statements showing when the payments were deducted from the account. I know how to present the information to the CPA firm for the preparation of the tax return.

Of course a CPA would never admit that one of their bretheren was wrong. That is the way that community opperates. Remember, these are the same guys who gave us Enron Accounting.

[Margaret CPA in OH]

Your characterization of CPA's is a bit too broad, I think. I have made mistakes (two or three, I think) and admitted to them. Several of my clients have come to me because their prior EA or CPA has made a mistake or I have discovered mistakes which have been made.

In the situation you've described, I think that billing $1500 to correct their mistake (their staff omitted a form) is totally unwarranted. I would never bill for a mistake that I made. It says so in my engagement letter. I hope your company owner insists on this bill being withdrawn and I hope the owner looks for another firm for future work.

Even more, I hope that you modify your opinion of CPA's as a group. The firm you describe is not representative of the vast majority of individual CPA's and firms that I know. Just reflect on the CPA's that you've met through this venue. Do you really believe we ALL "have balls of steel and will steal from God or Satan?" I am an elder and deacon in my church so would have an extremely difficult time stealing, especially from God and, being a woman, have, well, different body parts!

[taxxcpa]

It does seem strange that someone would accuse all CPAs of being greedy and unethical money grubbers just because of one CPA firm's billing excess.

I could just as easily take the same approach and condemn all unlicensed tax practitioners because some of them fabricate nonexistent dependents and dream up fake deductions to get illegal refunds. You don't usually hear of CPAs doing that sort of thing.

I thought guilt by association went out with Joe McCarthy.

[jainen]

>>It says so in my engagement letter.<<

Most likely this company did not use your engagement letter. I believe most professionals would hold that IRS representation is not part of the original tax preparation engagement.

It isn't always easy to assign blame. For example, I think a corporate taxpayer has to elect annualization with the first estimate. If that's the case, it might not be so clear that the accountant made an error. I could certainly see how they might have several billable hours researching and trying to argue with the IRS about it, since that is apparently (according to the original post) what the owner wanted them to do.

[OldJack]

>>Of course a CPA would never admit that one of their bretheren was wrong. That is the way that community opperates. Remember, these are the same guys who gave us Enron Accounting.<<

Another example of a non-professional tax preparer that likes to slam those that have taken the time and expense to prove they are qualified to practice.

Form 2220 Instructions page 1:

>>Who Must File

Generally, the corporation does not have to file this form

with its income tax return because the IRS will figure the

amount of any penalty and notify the corporation of any

amount due.<<

edit: Have you ever looked at the amount of time it takes to prepare form 2220 Annualized Income Installment Method? I expect the CPA's billing is not excessive.

[MAMalody]

From the OP: They tell me we should not have to pay and they will take care of it. The preparer of our return just left out the form on the return.

The wording suggests to me that the preparing firm/preparer had computed the form but did not include it when the return was submitted to the IRS. If my interpretation is correct, that would tend to indicate that the preparer made an error, whether he was an attorney, CPA, EA on unenrolled preparer. In my practice, when I make a mistake I don't usually charge the client for it. I eat it and use it as an encouragement to not make that same mistake again, or for that matter, try not to make any. Just my two cents worth.

[jainen]

>>The wording suggests to me that the preparing firm/preparer had computed the form but did not include it<<

Perhaps that was the first impression, but it was obviously wrong because submitting the form did not solve the problem. We don't know why the form did not solve the problem, and we don't even know who "they" at the firm were. We DO know the owner wanted his accountants to handle the response. I can't think of any reason why that response should include updating the employees with details about their boss's tax problems.

[Booger]

I'm a CPA and didn't take offense to BD Tom's remarks.

Seems like some of you need to buy one size larger underwear.

Easy-Going Booger

[taxxcpa]

It takes something more than "nerve" to become a CPA. The reason accountants do not become CPAs is that they either do not want to do the studying or they do not have the ability to learn what it takes to pass the test.

It may take "nerve" to charge an excessive fee. Doctors charge much higher fees than CPAs, so you could make a specious comment that you do not have the "nerve" to be a doctor. In my case, I will freely admit that I do not have the ability to learn what it takes to become a doctor.

[kcjenkins]

Atticus, I know Tom personally, and I can assure you that he has the ability to become a CPA if he wanted to. Not a doubt in my mind about that. However, like many of us, he's much more interested in tax work than in auditing, so taking the time to get those letters after his name does not make economic sense. He was, however, working on getting a Masters degree in Taxation when I met him. Since he has a family and works two jobs, I don't know if he finished it yet. But I have no hesitation in stating that he is a very competent tax professional, as well as being a very nice guy. And married to a very nice wife, as well.

[BulldogTom]

Atticus, I know Tom personally, and I can assure you that he has the ability to become a CPA if he wanted to. Not a doubt in my mind about that. However, like many of us, he's much more interested in tax work than in auditing, so taking the time to get those letters after his name does not make economic sense. He was, however, working on getting a Masters degree in Taxation when I met him. Since he has a family and works two jobs, I don't know if he finished it yet. But I have no hesitation in stating that he is a very competent tax professional, as well as being a very nice guy. And married to a very nice wife, as well.

I am blushing profusely KC. Thank you for your kind words.

Yes, I finished up my Masters Program.

And the next time you are out here visiting your grandchildren, call me and we will go out to dinner again. If you are willing to drive up to Lodi, I will treat you to dinner.

Tom

Lodi, CA

[kcjenkins]

I'll take you up on that the next time I get there, Tom. Because of Don's health, I did not get out at all this year. Hopefully next year will be better. Congrats on the Masters Degree. by the way.