New Tax Guy redid a bunch of things that affect investment convert values without asking won't budge

[Anonymous]

We decided to switch to a new tax accountant this year after using a previous person for over 15 years. We provided him the previous year's returns and everything organized he even said repeatedly you guys are very organized this really helps keeps the costs low.

We have 3 rental properties and a primary home w/ home office and it has been reported that way for 10 years.

He initially said it would cost around 1-1200 and said he would continue off with the previous return.

A few weeks later he sends us back the return and we open it up. The bill says 2000 with a client initial client conference of 300 and a courtesy discount of 700 which makes the bill $1600.

I called him back a week a go to ask what the extra charges were and he told me he had spend a lot of time to rework all of our investment properties because the valuations were too high when they converted to rentals. He went in and took the county assessed values on those years, which would be of course substantially lower than the what we previously had. Our previous tax person used the sales value because the homes were converted into rentals with 1-2 years. I told him that I wish you would have talked to me first before billing all these hours and also since it is a substantial change, but he said that's the way he works and if he did he would have to bill for those hours.

1) This obviously screws us when we sell in the future because the assessed values are about 150-50k less than the values our previous tax person making it a larger gain
2) Is this going to trigger an audit because he reworked basically all of our reported taxes for over 10 years (he claims it won't)
3) He claims he won't budge unless we get back dated appraisals because the real estate market was down and he would be lying (I don't really agree with this because he isn't a real estate expert and he keeps saying "he makes no claims to be"). Of course 3 appraisals are going to cost well over $1500.
4) He started saying we may have to do amended returns to fix this etc... but he doesn't think it would be a problem.

He claims that the next years tax return would be around $1000 and the first year is always the most. Fine and good but he doesn't know that the friends that referred us to him have the almost identical tax situation, properties, paper work etc.. and they pay $650 a year. I think our income is about double there's so maybe he charges us more?

What would you do? I still haven't responded because I am at a loss at what to do. I am now regretting the decision to switch and our previous tax person was always around $7-$800 but we had a few issues with reporting nanny taxes that we had finally rectified but we were a bit fed up it took 3 returns. I feel like this is going to really

[Anonymous]

Anonymous wrote:We decided to switch to a new tax accountant this year after using a previous person for over 15 years. We provided him the previous year's returns and everything organized he even said repeatedly you guys are very organized this really helps keeps the costs low.

We have 3 rental properties and a primary home w/ home office and it has been reported that way for 10 years.

He initially said it would cost around 1-1200 and said he would continue off with the previous return.

A few weeks later he sends us back the return and we open it up. The bill says 2000 with a client initial client conference of 300 and a courtesy discount of 700 which makes the bill $1600.

I called him back a week a go to ask what the extra charges were and he told me he had spend a lot of time to rework all of our investment properties because the valuations were too high when they converted to rentals. He went in and took the county assessed values on those years, which would be of course substantially lower than the what we previously had. Our previous tax person used the sales value because the homes were converted into rentals with 1-2 years. I told him that I wish you would have talked to me first before billing all these hours and also since it is a substantial change, but he said that's the way he works and if he did he would have to bill for those hours.

1) This obviously screws us when we sell in the future because the assessed values are about 150-50k less than the values our previous tax person making it a larger gain
2) Is this going to trigger an audit because he reworked basically all of our reported taxes for over 10 years (he claims it won't)
3) He claims he won't budge unless we get back dated appraisals because the real estate market was down and he would be lying (I don't really agree with this because he isn't a real estate expert and he keeps saying "he makes no claims to be"). Of course 3 appraisals are going to cost well over $1500.
4) He started saying we may have to do amended returns to fix this etc... but he doesn't think it would be a problem.

He claims that the next years tax return would be around $1000 and the first year is always the most. Fine and good but he doesn't know that the friends that referred us to him have the almost identical tax situation, properties, paper work etc.. and they pay $650 a year. I think our income is about double there's so maybe he charges us more?

What would you do? I still haven't responded because I am at a loss at what to do. I am now regretting the decision to switch and our previous tax person was always around $7-$800 but we had a few issues with reporting nanny taxes that we had finally rectified but we were a bit fed up it took 3 returns. I feel like this is going to really

Sorry his send too soon...

I feel like this is going to really to screw things up and mess up a lot of issues going forward and will actually increase my chances of being audited. I don't have anything to hide and have never done anything wrong it's just logically I would be like a change like this would trigger a review. The whole point of switching tax people was to avoid a review and make it easier. Our old tax person doesn't know we switched but we obviously had this guy do our taxes and I am not sure if I would feel right not paying it because he did do the work. Ughh this sucks. Why the hell do people just do this, stop going off on tangent and check back with the client you are working with.

[Anonymous]

If it were me, I'd take what he's done so far and complete the return on my own. You can change the parts you don't like back to the way you want it. It's really not hard to do on paper or using tax software, especially if you have his draft in hand.

You probably can't get out of paying his fee, but you can tell him thanks but you will be filing your return on your own and will not need any further services form him.

And then go looking for a new tax person in August when things aren't busy.

[Anonymous]

Do you mean accountant or...?

[Anonymous]

Anonymous wrote:If it were me, I'd take what he's done so far and complete the return on my own. You can change the parts you don't like back to the way you want it. It's really not hard to do on paper or using tax software, especially if you have his draft in hand.

You probably can't get out of paying his fee, but you can tell him thanks but you will be filing your return on your own and will not need any further services form him.

And then go looking for a new tax person in August when things aren't busy.

Yes. Buy turbotax and switch the changes back to how they were. Not hard to do. Turbotax walks you through it.

[Anonymous]

I don't understand why he would go back and change the book value on your properties. I think you need a second opinion before you go with this guy's numbers unless you think the value actually was much lower than what you paid at the time of conversion. I would not file with completely different depreciation schedules without a good reason!

As for paying this guy, I would definitely negotiate him down. Don't pay more than the initial estimate. He should have called when it looked like he was going over. He needs to write that part off.

[Anonymous]

Is he under any ethical obligation to report that difference in value? Even if it's his opinion?

My spouse and I think the turbo tax idea is good. I used to do my own returns and with my prior accountant I had to fill in every item a worksheet which took hours.

[Anonymous]

Goodness, this person sounds awful.
If you can negotiate down, do so - he needs to learn a lesson.

[Anonymous]

I'd pay the $1,200 and tell him you don't need further services. If he gets pissy I think it's totally fair to say that you agreed to $1,200 and when it became evident he would go over he should have contacted you.

I also agree that whether you use sale price or assessed values is totally a subjective decision and the idea that one is categorically better than the other is false. Moreover, if any such argument could be made, it would favor sale price data as that's reflective of actual market conditions while assessed or appraised value is based on models and forecast data.

[Anonymous]

OP, tell him this is like getting your car fixed. They need to call you if they are going to charge over the agreed upon amount.

[Anonymous]

Anonymous wrote:I'd pay the $1,200 and tell him you don't need further services. If he gets pissy I think it's totally fair to say that you agreed to $1,200 and when it became evident he would go over he should have contacted you.

I also agree that whether you use sale price or assessed values is totally a subjective decision and the idea that one is categorically better than the other is false. Moreover, if any such argument could be made, it would favor sale price data as that's reflective of actual market conditions while assessed or appraised value is based on models and forecast data.

Agree with this. But if he is a CPA (?) doesn't he have to sign the return if you leave it with him. We've been with the same CPA for 20 years and he always signs as the preparer - never been audited. Ours is complicated. Two home offices and trusts. It's about $3K a year but money well spent and I think having the CPA sign off on the return has probably saved us a few audits. We also file extensions and quarterlies so that also may be why we pay as much as we do. You need someone new but you need to straighten this out quickly unless you are going to pay estimateds and file for an extension.

[Anonymous]

He's wrong. The fair market value does not equal the assessed value. He shouldn't have changed it and are you saying he changed all your previous years' depreciation? No, no, no. I'd pay him what you originally agreed and either fix it yourself or find someone else.

[Anonymous]

OP here, after a few hours I just finished turbo tax on my own. I haven't used turbo tax in almost 10 years, it's really improved.

Here's the kicker!

It has my Federal owed at $2500 less and my state return at $300 more. LOL I think I am just going to do turbo tax from now on.

[Anonymous]

You should not pay more than the estimate (even paying that for something he went against my intent would give me pains). If he pushes back I would think about reporting it to the state CPA professional ethics committee. He should not have made a massive change without consult you and certainly should not charge you beyond the engagement letter without consulting. He is the preparer, that's all. It is your return, not his.

That's a lot of money for something that is useless for you.

[Anonymous]

Anonymous wrote:You should not pay more than the estimate (even paying that for something he went against my intent would give me pains). If he pushes back I would think about reporting it to the state CPA professional ethics committee. He should not have made a massive change without consult you and certainly should not charge you beyond the engagement letter without consulting. He is the preparer, that's all. It is your return, not his.

That's a lot of money for something that is useless for you.

I mean at the end of the day it would be about 250 dollars, I am not sure if it would be worth it. Of course I am going to have to buy turbotax for 120 or whatever the most expensive one is. I like how they let you do the estimate without paying yet. I am really sold on turbotax so far.