Here at Henry+Horne, we value highly the work that we do and the services we provide to our clients. As CPAs, are we saving lives as heart surgeons? Not even close, but we do help people like you navigate the complex world of taxes. Sometimes the answer we give is a wonderful (read “lucrative”) surprise, and other times – not so much. Believe me, we hate making those calls.
It leads me to a story that happened recently. A new client, let’s call him Joe, owns a business in town. We prepared his business tax return that sent a loss directly to his personal return. The only issue here is that the loss was disallowed on his individual taxes. Without getting too technical, he had already taken too many losses in previous years and couldn’t take this year’s losses until he had some business income. When I called Joe to tell him the bad news, he mentioned that he prepared his own taxes using tax software and found a much better result – a refund in the thousands of dollars. Of course, in my professional opinion, this was the incorrect answer, as the business losses were deducted on his return from the software. I explained to Joe the difference in the returns and advised that he not file using the software prepared return given that he was declaring incorrect information to the government. Nevertheless, Joe proceeded.
In situations like this, we are placed in a tough spot. Joe hired us to be a trusted advisor to him and his business, yet did not value our opinion enough to have us file his personal tax return. At that point, we have to evaluate the relationship and determine if we can continue advising Joe and his business going forward. Mind you, this is not something we do just to be vengeful because Joe didn’t use our service. When we have disagreements like this, we must follow different regulations from an alphabet soup of acronymed regulatory agencies and oversight committees and determine if this client’s views match ours and if we can be an impartial and effective advisor going forward.
It’s easy to get in disagreements with CPAs when real dollars are on the line. I would encourage you to get a second opinion if you disagree with your current advisor, but remember, you hired them for a reason and our job as CPAs is to keep you out of trouble and follow many complex rules. If the disagreement persists, it might be in both parties’ interests to go in a different direction.
Brock Yates, CPA, MT