Deceased Tax Preparer

A family friend who had a tax office unexpectly passed away.

I was asked if I could finish some returns that were started and prepare a few that were on extension and ready to be prepared.

They will try to salvage and sell off the practice if they can get something for it (which I may be interested in buying myself).

Question is, am I allowed to be added as a preparer to file returns under their efin even though they've passed away. At least until the estate settles or the practice is sold.

I would just use my own EFIN. I wouldn't think you could use theirs...legitimately.

HowardS is correct. You can't use the deceased taxpreparer's PTIN or EFIN when you are preparing the returns. Just use your and make sure you have something in writing from the taxpayer that you are either doing this one time with whatever information you could gather or you will be taking over their account going forward. Otherwise you may find yourself dealing with prior issues for taxpayers who are not even your client.

I believe it was Kevin Huston on Tax Almanac who observed that, a week after death, a tax preparer's business is essentially of no value. Time will tell if that is so in this case, but it seems to me that the family would be better served by swiftly offering first dibs to the person they have asked to finish up the returns. That way, they realize some value from the business.

Thanks everyone, that what I thought.

What you all said is basically what I told the family but I just wanted to double check.

I've made them an offer to but the client list and they're mulling it over but they need to act fast since there are unfiled returns.

I think they are in a bit of denial that the practice itself has essentially no value.

I've made them an offer to bu[y] the client list [...] I think they are in a bit of denial that the practice itself has essentially no value.

Isn't the practice the same thing as the client list? (plus tax return data files)

I've made them an offer to bu[y] the client list [...] I think they are in a bit of denial that the practice itself has essentially no value.

Isn't the practice the same thing as the client list? (plus tax return data files)

Maybe it is but offering to "buy the practice" to me sounds like there's something of value to be had versus just a plain old, worthless, boring, "client list". It's all word play.

So I'm taking over the practice.

I spoke with Lacerte about transferring the license since I don't currently use Lacerte. They said contact IRS and have all his clients transferred to my efin and then submit new efin letter to Lacerte so I can have access to all prior client information.

Question, does transferring his efin to me expose me to any liabilities that may arise from work he did? Sounds like I'd be responsible for all prior work.

Also, any suggestions on writing up the contract?

Do they need to notify clients that I'm taking over?

Any help would be appreciated.

Have you checked with your E&O?

I spoke with Lacerte about transferring the license since I don't currently use Lacerte. They said contact IRS and have all his clients transferred to my efin and then submit new efin letter to Lacerte so I can have access to all prior client information

Sorry, but that is nonsense. The IRS does not "transfer a client" to an EFIN. An EFIN is associated with a specific tax return that has been efiled. Neither the taxpayer, nor any unfiled returns, have an EFIN associated with them by the IRS.

Lacerte is a different matter. I suspect the license is tied to an EFIN, and whether or not Lacerte will allow you take over an annual license after primary tax season is up to them. Personally, I would just continue to use my own software, and use the conversion process supported by my vendor to import the Lacerte files. Or if you plan to start using Lacerte for your own practice then buy your own TY2019 license, which should give you access to TY2018 and prior year software as well. You can probably buy a PPR (pay per return) license relatively cheap, which will allow you to open and work with tax files, if not print or efile them.

submit new efin letter to Lacerte so I can have access to all prior client information

Isn't all the prior client information on the local computer, not in the possession of Lacerte? Or are you talking about online version of Lacerte (whatever it's called).

Tell us more about "[t]hey said contact IRS and have all his clients transferred to my efin"

I still think the procedure is a letter from the spouse to all clients where she says a great friend of the deceased will be taking over all the files unless clients pick them up in a week. Contact him for all information after that date stated. Make sure you have someone write it that has better terminology than I am writing.

Make sure collection of receivables and work in process is identified and cutoff for billing.

Good luck. The letter is a huge help and your liability insurance carrier probably has examples. remember to have the spouse include that you are the number one preparer in the 60 States.

Makbo is correct. Spoke with IRS and they said nonsense. Called Lacerte and spoke with different person who apologized for the wrong information. All that's needed is letter stating I'm the new primary account holder and my efin letter.

After that I can pay for the user License $398 if I want to continue to access the software or I can renew with Lacerte and continue preparing for next year. If I don't purchase license I won't able to log into the program (according to Lacerte).

2nd option is to switch to Proseries and pay extra $100 for Lacerte license.

3rd option is to use my current software, Drake. 90% of returns are 1040's which Drake can handle no problem. Drake does seem to have a problem with CA and Business returns though. You really need to be on your toes as I found out while experimenting with a CA SMLLC. Not sure I want to deal with constantly second guessing whether the program is correct. I'd be processing about 700 returns. Any thoughts from Drake users?

I will certainly contact my E&O to let them know. They'll probably want to raise my rates since my production will probably double. Aside from a handshake and a bill of sale, anything I should be aware of. Should we hire someone to draw up an agreement? A Broker maybe? IDK. This is my first purchase, so I'm a little