Should I fire my tax preparer?

[HawkeyePierce]

Earlier this year I hired a tax preparer. My income is pretty straightforward, all W2 income plus the usual dividends from my taxable brokerage account. The complications are from my RSU/ESPP shares and backdoor Roth IRA/mega backdoor 401k.

My preparer sent me my return in February and naturally I didn't get around to reviewing it until this weekend.

I've found the following errors:

• The 1099-B form from Schwab, for my ESPP shares, clearly states "report on Form 8949, Part I, with Box A checked". The 1099-B for my RSUs says that same but with Box B. My preparer did not report them on a Form 8949. When I asked her about this, she said to talk to Schwab.
• The cost basis for my ESPP shares on the 1099-B form is wrong, which is why Schwab also sent me a 3922 with the adjusted basis. She ignored it.
• I made a nondeductible traditional IRA contribution in 2019 and later in the year converted it to a Roth, with gains of about $100. She reported the entire distribution as taxable on my 1040. When pressed, she told me to talk to Vanguard. She did not prepare a form 8606. I also converted some prior years' nondeductible contributions that had not yet been converted to Roths (all in about $15k) and I had after-tax 401k contributions that were converted to a Roth 401k.

As a result of her mishandling my backdoor Roth contributions, she thinks I owe $2000 more than Turbotax.

I haven't signed the efile authorization yet, so none of these mistakes have been sent to the IRS. Should I just ignore her return and go through Turbotax instead? I already paid her fee but I'm willing to fight about that later and just file via Turbotax today.

[fabdog]

Yes, you should not proceed with the return she prepared. It appears a number of semi complex issues which she likely rarely or never sees were not handled correctly.

I'd file with TT, let the preparer know you were not satisfied with the work, and ask for your money back.

And of course, it would have made for a less stressful experience if you'd checked it out anytime between Feb and now... but water under the bridge

Mikr

[aristotelian]

Why would you even consider using this person again? It is clear that you know more about your tax situation than she does.

[Jack FFR1846]

I send my consolidated 1099 from Schwab to my preparer and they have no problem correctly filing my taxes. She tells you to talk to Schwab? I think when she asks for payment, I'd respond "Talk to Schwab". There's a basic competence problem here with this person.

[02nz]

Tax preparers are a bit like financial advisors, by the time you know enough to be able to tell whether they're doing their properly ... you can do it yourself. There are some exceptions for complex cases, but better to seek out specific advice then.

[HawkeyePierce]

Yes, you should not proceed with the return she prepared. It appears a number of semi complex issues which she likely rarely or never sees were not handled correctly.

I'd file with TT, let the preparer know you were not satisfied with the work, and ask for your money back.

And of course, it would have made for a less stressful experience if you'd checked it out anytime between Feb and now... but water under the bridge

Mikr

Yes, that part is 100% my fault. Lesson learned the hard way.

When I was vetting preparers I interviewed them specifically about these tax issues. She sounded like she knew what she was talking about at the time.

[livesoft]

Since you paid them, I would
(a) file an extension. It is trivial to do.
(b) get them to fix the tax return to your liking before October and then submit.
(c) don't use them again.

[HawkeyePierce]

Since you paid them, I would
(a) file an extension. It is trivial to do.
(b) get them to fix the tax return to your liking before October and then submit.
(c) don't use them again.

So far she doesn't seem like she's open to fixing these issues based on our back-and-forth over the last few days.

I just sent her an email firing her and asking for a refund. If she doesn't come through, I might pursue a chargeback (I paid with an Amex so my chances are reasonable).

[Stinky]

Since you paid them, I would
(a) file an extension. It is trivial to do.
(b) get them to fix the tax return to your liking before October and then submit.
(c) don't use them again.

So far she doesn't seem like she's open to fixing these issues based on our back-and-forth over the last few days.

I just sent her an email firing her and asking for a refund. If she doesn't come through, I might pursue a chargeback (I paid with an Amex so my chances are reasonable).

It sounds like you've got good reason to fire her.

Best of luck in getting a refund. And use Turbo Tax or a similar program going forward.

[Living Free]

So far she doesn't seem like she's open to fixing these issues based on our back-and-forth over the last few days.

I just sent her an email firing her and asking for a refund. If she doesn't come through, I might pursue a chargeback (I paid with an Amex so my chances are reasonable).

Wow, that's some lousy customer service!

[HawkeyePierce]

So far she doesn't seem like she's open to fixing these issues based on our back-and-forth over the last few days.

I just sent her an email firing her and asking for a refund. If she doesn't come through, I might pursue a chargeback (I paid with an Amex so my chances are reasonable).

Wow, that's some lousy customer service!

I sent her my list of concerns, she told me to talk to the brokers, I replied more forcefully (bringing up that the forms specifically say "report on form 8949", etc) and she's since gone silent. She normally responds with at least an acknowledgement pretty quickly during business hours.

[Chuck]

Definitely file an extension, make an estimated payment (if applicable), and you'll have several stress-free months to fix it yourself. I have done this and it's no big deal.

[HawkeyePierce]

Definitely file an extension, make an estimated payment (if applicable), and you'll have several stress-free months to fix it yourself. I have done this and it's no big deal.

I think I'm ready to just file with TT today. The main reason I hired a preparer is because TT's handling of RSUs and ESPPs has been confusing in the past, but this year's version is much clearer.

[8foot7]

There is no point in paying someone to do something wrong.

[Katietsu]

So far she doesn't seem like she's open to fixing these issues based on our back-and-forth over the last few days.

I just sent her an email firing her and asking for a refund. If she doesn't come through, I might pursue a chargeback (I paid with an Amex so my chances are reasonable).

Wow, that's some lousy customer service!

I sent her my list of concerns, she told me to talk to the brokers, I replied more forcefully (bringing up that the forms specifically say "report on form 8949", etc) and she's since gone silent. She normally responds with at least an acknowledgement pretty quickly during business hours.

So, she is sort of right on this (but not for you this year). If you have all covered shares (box A and D) and no adjustments to make, you can skip the 8949 completely and report directly on the Schedule D. I do not bring this up to defend the preparer. I bring this up so that if you complete a return in the future and you have a form that says to report on form 8949, Part 1, with box A checked and the software does not prepare an 8949, you should know that might be perfectly OK.

[HawkeyePierce]

So far she doesn't seem like she's open to fixing these issues based on our back-and-forth over the last few days.

I just sent her an email firing her and asking for a refund. If she doesn't come through, I might pursue a chargeback (I paid with an Amex so my chances are reasonable).

Wow, that's some lousy customer service!

I sent her my list of concerns, she told me to talk to the brokers, I replied more forcefully (bringing up that the forms specifically say "report on form 8949", etc) and she's since gone silent. She normally responds with at least an acknowledgement pretty quickly during business hours.

So, she is sort of right on this (but not for you this year). If you have all covered shares (box A and D) and no adjustments to make, you can skip the 8949 completely and report directly on the Schedule D. I do not bring this up to defend the preparer. I bring this up so that if you complete a return in the future and you have a form that says to report on form 8949, Part 1, with box A checked and the software does not prepare an 8949, you should know that might be perfectly OK.

That's my understanding as well, based on conversations with some of my coworkers. We usually get a 1099-B with some sales under Box A and some under Box B.

[Luckywon]

I'm curious, is your tax preparer a CPA? How did you find her? How much did she charge?

[J295]

In my experiences, there are typically two sides to every story. Often these conflicts fester and grow due to poor communication.
Apparently your vetting process failed and this is not a good fit. Moving away from this relationship seems prudent as you have determined to do.

[seawolf21]

I don’t see anything on the first post that can’t be done easily in TT. There are questions for RSU in TT.

[HomeStretch]

Agree with either filing by July 15 via TurboTax or filing an extension to have preparer correct the return.

If your preparer or credit card issuer will not give you a full refund perhaps settle for splitting the bill and parting ways amicably.

Given that a Form 1040 not under extension is due tomorrow, it doesn’t surprise me that your preparer is not getting back to you promptly after you held off on reviewing the return for 5 months. That’s not a criticism, just a statement that she is probably swamped right now with questions/issues. From all the other people that waited 5 months to review their return drafts.

[Stinky]

Given that a Form 1040 not under extension is due tomorrow, it doesn’t surprise me that your preparer is not getting back to you promptly after you held off on reviewing the return for 5 months. That’s not a criticism, just a statement that she is probably swamped right now with questions/issues. From all the other people that waited 5 months to review their return drafts.

If the preparer made as many mistakes on the returns of others as she did on OPs, her inbox may be full of complaints.

[HawkeyePierce]

I never sent her the eFile authorization but somehow she filed anyways.

Now I have to amend my return.

[palanzo]

Earlier this year I hired a tax preparer. My income is pretty straightforward, all W2 income plus the usual dividends from my taxable brokerage account. The complications are from my RSU/ESPP shares and backdoor Roth IRA/mega backdoor 401k.

My preparer sent me my return in February and naturally I didn't get around to reviewing it until this weekend.

I've found the following errors:

• The 1099-B form from Schwab, for my ESPP shares, clearly states "report on Form 8949, Part I, with Box A checked". The 1099-B for my RSUs says that same but with Box B. My preparer did not report them on a Form 8949. When I asked her about this, she said to talk to Schwab.
• The cost basis for my ESPP shares on the 1099-B form is wrong, which is why Schwab also sent me a 3922 with the adjusted basis. She ignored it.
• I made a nondeductible traditional IRA contribution in 2019 and later in the year converted it to a Roth, with gains of about $100. She reported the entire distribution as taxable on my 1040. When pressed, she told me to talk to Vanguard. She did not prepare a form 8606. I also converted some prior years' nondeductible contributions that had not yet been converted to Roths (all in about $15k) and I had after-tax 401k contributions that were converted to a Roth 401k.

As a result of her mishandling my backdoor Roth contributions, she thinks I owe $2000 more than Turbotax.

I haven't signed the efile authorization yet, so none of these mistakes have been sent to the IRS. Should I just ignore her return and go through Turbotax instead? I already paid her fee but I'm willing to fight about that later and just file via Turbotax today.

What qualifications does she have as a tax preparer? The first two items are pretty standard. It sounds like she never prepared a return for someone who has ESPPs.

I would file a complaint with the BBB and her professional organization.

[Swansea]

I did a friend's return this year. She had used a tax preparing service previously. I was amazed at the data error that had been made.
Always review the final product.

[Seasonal]

I never sent her the eFile authorization but somehow she filed anyways.

Now I have to amend my return.

You can complain to the IRS: https://www.irs.gov/tax-professionals/m ... n-preparer

The first listed example of misconduct is: "Filing an individual Form 1040 series return without your knowledge or consent."

That may be more trouble than it's worth, as I'd imagine it will cause the IRS to focus on your return.

[student]

It seems that you are knowledgeable. If you have to review the work, why not do it yourself and save the money?

[megabad]

If she filed without your permission that is a bigger issue. Also Regardless of whether she is right or wrong about your tax situation, if She can’t explain things to your liking, she is not useful in my opinion. That said, I think you have zero basis to enforce a chargeback. She performed services and was paid for them. The fact that she performed them poorly isn’t altogether relevant in my opinion. If she cares about customer service though, she should try to work through this with you at some point (maybe after July 15 though). Good luck.

[CyclingDuo]

Definitely file an extension, make an estimated payment (if applicable), and you'll have several stress-free months to fix it yourself. I have done this and it's no big deal.

I think I'm ready to just file with TT today. The main reason I hired a preparer is because TT's handling of RSUs and ESPPs has been confusing in the past, but this year's version is much clearer.

Yes, TurboTax had some pretty healthy upgrades this year. I was very pleased and actually finished and filed two days early which is a record for me.

CyclingDuo

[lstone19]

That said, I think you have zero basis to enforce a chargeback. She performed services and was paid for them. The fact that she performed them poorly isn’t altogether relevant in my opinion. If she cares about customer service though, she should try to work through this with you at some point (maybe after July 15 though). Good luck.

I'm not an expert at chargebacks but I would think that a service not performed up to professional standards and flat out wrong would be grounds for a chargeback. A service done incorrectly is in many ways the same, if not worse, than a service not done at all.

[fabdog]

You most likely signed some form of an engagement letter when you started with her. Pull that out and see what it says.

Not withstanding that, she may be willing to refund or meet you halfway on a refund... but I'd push it next week

Mike

[HawkeyePierce]

My bigger concern at the moment is not running afoul of the IRS.

Can someone confirm my understanding of the correct course of action here?

1) By the end of today, make the payment required of the bad return filed by my preparer, even though I believe it's more than I actually owe. This would avoid penalties.

2) Mail in a 1040-X to amend my return. This doesn't have to be done by today. If I overpay today, the IRS would eventually send me a refund once they process my 1040-X.

Do I have that right?

[retiredjg]

My preparer sent me my return in February and naturally I didn't get around to reviewing it until this weekend.

I probably have a different take on this than most.

She did her part and sent it to you in Feb. You had 4+ months to get things fixed. If there were things to change, Monday July 13 is not the time to bring them up - probably one of her busiest days of the year.

Assuming you or a family member has not been ill much of this time, the communication problem is yours, not hers. You should just own it and move on.

Since it appears she did file the taxes you probably had given your authorization even if you didn't know it. If not, a formal complaint about that seems appropriate.

Not money well spent, but you can't exactly blame her for not fixing things in time. She never had the opportunity to make things right.

Can someone confirm my understanding of the correct course of action here?

1) By the end of today, make the payment required of the bad return filed by my preparer, even though I believe it's more than I actually owe. This would avoid penalties.

2) Mail in a 1040-X to amend my return. This doesn't have to be done by today. If I overpay today, the IRS would eventually send me a refund once they process my 1040-X.

Do I have that right?

I think you have it right.

[Stinky]

My bigger concern at the moment is not running afoul of the IRS.

Can someone confirm my understanding of the correct course of action here?

1) By the end of today, make the payment required of the bad return filed by my preparer, even though I believe it's more than I actually owe. This would avoid penalties.

2) Mail in a 1040-X to amend my return. This doesn't have to be done by today. If I overpay today, the IRS would eventually send me a refund once they process my 1040-X.

Do I have that right?

I am not a tax professional. But what you outline makes a lot of sense.

I might amend one point you made. You said paying the too-high amount today would avoid penalties. I would amend that to say it will avoid IRS confusion, and possible subsequent communication from IRS.

You shouldn’t have a penalty assessed if you pay the correct amount today (which is less than the amount in the filed tax return), but why confuse the IRS?

[ResearchMed]

About that authorization...

Our CPA insists on our providing a proper *signed* form (signed by *both* of us, not just one) authorizing him to interact with the IRS on our behalf, even if it's just e-filing our return.
But I don't know if that is required by IRS, or just our CPA being careful.

Double check whether you ever authorized it in a previous agreement, and also if that is "enough".

RM

[SmileyFace]

I would definitely fire them and do them yourselves moving forward.
I, personally don't understand why so many people pay and trust tax preparers - so many stories of mistakes and mishandling of taxes are out there. Unless your circumstance are very complex in which case you better research and find a good one.
If you need to pull all the data together yourself, check all their work, correct their work - what is it you are paying for?

I recently started doing a family members taxes - I started by looking over their tax returns from the last few years - not only did the preparer make mistakes but they made inconsistent mistakes from year to year which should have screamed AUDIT loud and clear.

[BolderBoy]

[*]I made a nondeductible traditional IRA contribution in 2019 and later in the year converted it to a Roth, with gains of about $100.

I'm curious as to why you waited to make the conversion?

... and it sounds like you should do your own taxes.

[HawkeyePierce]

[*]I made a nondeductible traditional IRA contribution in 2019 and later in the year converted it to a Roth, with gains of about $100.

I'm curious as to why you waited to make the conversion?

... and it sounds like you should do your own taxes.

Backdoor Roth. I'm phased out of directly making Roth IRA contributions.

[Flyer24]

I think you might have a little trouble getting all your money back from the tax preparer. She has a case too. She gave you back your return very early (February). I think that is impressive. Mine takes until April. You could have easily looked over it then and given her enough time to make it right. Preparers and CPA’s get swamped when a deadline approaches. I could probably see her frustration that you waited until two days before the deadline to bring it up. It seems to be a communication issue that unfortunately lies on you for waiting so long. I am sorry to go against the grain but almost five months is a long time to sit on a return.

[frugaltigris]

Fire her.

My returns are almost as complicated but I do them on my own without even using Turbotax etc. IRS instructions are rigorous and if anything is missing then this forum helps. Gives great satisfaction.

[CyclingDuo]

1) By the end of today, make the payment required of the bad return filed by my preparer, even though I believe it's more than I actually owe. This would avoid penalties.

I would opt to pay the amended amount by the end of today rather than the amount due on the return your preparer filed electronically.

The amended return has the columns to compare the difference and it will all square with the IRS eventually.

CyclingDuo

[BolderBoy]

[*]I made a nondeductible traditional IRA contribution in 2019 and later in the year converted it to a Roth, with gains of about $100.

I'm curious as to why you waited to make the conversion?

... and it sounds like you should do your own taxes.

Backdoor Roth. I'm phased out of directly making Roth IRA contributions.

My question was poorly constructed.

You made the non-deductible, tIRA contribution. Why did you thereafter wait until "later in the year" to make the Roth conversion? Did you have a strategy in mind?

[HawkeyePierce]

[*]I made a nondeductible traditional IRA contribution in 2019 and later in the year converted it to a Roth, with gains of about $100.

I'm curious as to why you waited to make the conversion?

... and it sounds like you should do your own taxes.

Backdoor Roth. I'm phased out of directly making Roth IRA contributions.

My question was poorly constructed.

You made the non-deductible, tIRA contribution. Why did you thereafter wait until "later in the year" to make the Roth conversion? Did you have a strategy in mind?

I was letting it "season" based on prior guidance for the backdoor Roth. I hadn't realized that the 2018 tax bill changed that.

[mhalley]

Anyone can make a mistake, the key is what happens when you bring it to their attention. My cpa made an error several years ago, and when I brought it to his attention he promptly fixed it. Now you know that in addition to being error prone your preparer has terrible customer service and won’t fix their mistakes, which definitely is a fireable offense.

[RudyS]

Like others on the forum, I volunteered for AARP TaxAide. Standard procedure is to have a second counselor review each return before setting it up for efile. Client is present during the review. I have done this for about 15 years. Each time I do the reviewer role, I catch about one issue out of 30-40 returns. That's why we do the checking. To be honest, most of the "errors" do not affect the $$ of the return. Sometimes typos entering EIN, etc.

[megabad]

Next time maybe give the “tax preparer” a test run one year and see how close they get to your numbers, while allowing ample time for discussion of discrepancies? Of course, I don’t see much advantage to using a tax preparer. I mean I have to know my tax situation ahead of time to plan anyway so the only thing it would save me is filling out the forms which is maybe a few minutes (and many people can have done for free in my area). I have not yet met a “tax preparer” yet that would continually update me on withholding changes and estimated tax payments throughout the year. Maybe I am just not wealthy enough though. Or maybe that is just not something they do.

[inverter]

Geez... this tax preparer sounds like a hot mess. The fact that she eFiled without your explicit consent is pretty shocking to me, and although this is complete conjecture, would seem to me that it violates CPA & IRS ethics unless your engagement letter says otherwise.

I would definitely ask to speak with her boss if this isn't a one man shop. I don't think you should get all of your money back given that you waited until this week to provide feedback, but I would be hesitant to pay full price for this lackluster performance.

[MarkNYC]

1) By the end of today, make the payment required of the bad return filed by my preparer, even though I believe it's more than I actually owe. This would avoid penalties.

I would opt to pay the amended amount by the end of today rather than the amount due on the return your preparer filed electronically.

The amended return has the columns to compare the difference and it will all square with the IRS eventually.

I disagree with that advice. Here's why.

The OP said the tax return as filed shows tax that is probably $2,000 too high. Let's say the tax return shows $10,000 total tax, with $7,500 withheld, so $2,500 due with the tax return. The OP believes $8,000 should be the correct total tax, so only pays $500 with the filing of the tax return. Starting tomorrow, the $2,000 tax showing on the return that is unpaid will be subject to a late-payment penalty of 1/2% per month, plus interest. If the OP files an amended return next month showing the correct $8,000 tax, the 1040-X will also show $7,500 tax withheld and $500 paid with the original tax return, so no refund due based on the amended return. Meanwhile, the original 1040 account will still show $2,000 + due and unpaid, and it could take inconvenient correspondence and many months for this to be sorted out properly whiled the late-payment penalty and interest continue to accrue.

Since today is the filing deadline day, the OP has probably already taken some action, appropriate or not, but it was only yesterday (one day before the filing deadline) that the OP presented the problematic situation, so I will comment on the OP's last-minute tax preparation complaint in a separate post.

[psychodoc]

i didn't read your post. but, yes.

[MarkNYC]

My preparer sent me my return in February and naturally I didn't get around to reviewing it until this weekend.

I probably have a different take on this than most.

She did her part and sent it to you in Feb. You had 4+ months to get things fixed. If there were things to change, Monday July 13 is not the time to bring them up - probably one of her busiest days of the year.

Assuming you or a family member has not been ill much of this time, the communication problem is yours, not hers. You should just own it and move on.

Since it appears she did file the taxes you probably had given your authorization even if you didn't know it. If not, a formal complaint about that seems appropriate.

Not money well spent, but you can't exactly blame her for not fixing things in time. She never had the opportunity to make things right.

I agree with this. I am not excusing any errors made by a tax preparer, but for those who are harshly condemning the tax preparer, let's remember there are often two sides to a story, and we have only heard one side.

More to the point, when a client receives a completed tax return early (Feb) then waits 4+ months, until just before the filing deadline, to call the preparer and ask for explanations about certain items on the tax return, this action by the client shows a complete lack of consideration for the tax preparer's time. Suppose the tax preparer had 30 or 40 other clients who did the same thing? How is the preparer supposed to effectively deal with all these last-minute inquiries, some of which may involve complex issues, while at the same time trying to complete tax returns for other clients before the impending deadline? I can assure you almost all tax preparers resent this type of client behavior.

The OP could have dealt with any perceived tax returns errors in April, or May, or June, but chose not to. So in my view, based on the information presented, the problems the OP will have to deal with over the next few months related to this situation, are to a large extent self-inflicted.

[abyan]

I vote for "yes," fire them. I finally gave up on accountants. After a good two decades+ of using them, I just got tired of all the mistakes, the lack of any advice (I had to find out on my own about i401ks, vs the SEP-IRA the accountant set me up with), I had to find out on my own about backdoor Roths, and that I could easily quality for an HSA. They did nothing but plug my data into Turbotax. I never got any advice as to how to cut my taxes, how to increase my retirement contributions, etc. And, every year I'd catch an error or two (or more). Three accountants in that period, I finally got rid of the last one last year when she stopped responding to my emails for 3+ months, then suddenly reappeared. I did my own taxes with Turbotax Home Business, and knock on wood, I think I got it right. I entered my 2018 taxes by hand, using the taxes she did for me, as a template, in last year's software, then bought this year's and imported it. It wasn't easy at first, but I did a lot of googling, and now understand my taxes much better than I ever have. I even figured out how to enter the backdoor roth data correctly (again, Google, you guys, and White Coat, I suspect), and how to fill out my 5500EZ to boot. (Oh, I also figured out, ON MY OWN, that I needed to pre-pay my property taxes before the SALT limits kicked in -- again, the accountant was nowhere to be found, to tell me I could or should do this.)

So, yes, get rid of the accountant, get the right software, and do it yourself. It's hard at first, but once it makes sense, it's great.