So I acquired the client list of a retiring EA last year. One of those clients comes in this morning - this is my first interaction with him, other than setting up the appointment on the 'phone.
He gets 1099s for much of his income, a few checks and an unspecified amount of cash. He told me right at the start that he does not report the cash. Naturally, I told him he should and he decided quickly that we would not be a good fit (I agree). He also told me that the two prior EAs knew that he did not report cash. One is deceased and I never met him. The other, I'd find it hard to believe that he knew. I have looked at his work with a critical eye and asked questions of clients. That tends to confirm my own due diligence at purchase - he was good at what he did and ethical.
We parted company amicably enough and I am quite content that I will not be preparing his tax return. Now, this is my first year in business for myself. Is there anything else I should be doing? I wrote a detailed note for my file. Would a disengagement letter be a good idea? Or a bad one?