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Former CPA employer wants to use my EFIN

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#1
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I used to work for a CPA who was (more recently) involved in an SEC case and he lost his CPA. According to him, the case was total BS and he re-applied for his CPA and the board approved it.

He has also re-applied with the IRS for an EFIN and a PTIN, but of course this could take several months.

Recently, he had been filing under another former employee's EFIN and, though I'm not sure, I think the IRS sent that former employee a letter to stop.

Now he has come to me to use my EFIN while the IRS re-issues his.

Of course I can't put my practice at risk and unfortunately I think I have to say no.

He's the cowboy type and I anticipate a barrage of "why the hell not" etc.

All I can find is this:

§ 10.24 Assistance from or to disbarred or
suspended persons and former Internal Revenue
Service employees.
A practitioner may not, knowingly and directly or
indirectly:
(a) Accept assistance from or assist any person
who is under disbarment or suspension from practice
before the Internal Revenue Service if the assistance
relates to a matter or matters constituting practice
before the Internal Revenue Service.
(b) Accept assistance from any former government
employee where the provisions of § 10.25 or any
Federal law would be violated.


But I thought I remember from school and testing that there was more to this requirement.

Knowing him well, he will also make pointless arguments like, "well, I'm not disbarred anymore, so you can do it - what you're reading is for disbarred preparers". That's just how he thinks and how he argues.

Of course, I can just tell him politely that I'm not comfortable with it and end the relationship knowing that I did what I needed to do, that's life.

But is there somewhere in the code or Circ 230 that I can respond with additionally if he challenges my reasoning?
 

#2
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How did he accidentally lose his CPA license?

Tell him your insurance company won’t allow it (which is absolutely true).
 

#3
sjrcpa  
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It's your EFIN. Somewhere the EFIN rules must say it is to be used only for returns you, your firm, your employees efile.

Also, tax software requires EFIN validation. Even if you said he could use it, how would he get past this? Would he lie and say he is you?
 

#4
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ItDepends wrote:He's the cowboy type and I anticipate a barrage of "why the hell not" etc.

......
Of course, I can just tell him politely that I'm not comfortable with it and end the relationship knowing that I did what I needed to do, that's life.

But is there somewhere in the code or Circ 230 that I can respond with additionally if he challenges my reasoning?


You are better off not being associated with people like this. Anyone that deals with him will not think less of you if you end the relationship. You've already shared you're not hurting for business growth. Is there some other reason you want to maintain a relationship with this guy and continue to let him take up brainspace you could spend on ANYTHING else?
~Captcook
 

#5
ATSMAN  
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He's the cowboy type and I anticipate a barrage of "why the hell not" etc.


If you have any commonsense run as fast as you can :o

Nothing good for you will come out of this.
 

#6
novacpa  
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When you worked for him, how did he treat you?
In my career I've trained - close to 15 Junior Accountants,
and it is tedious work - a labor of love.
I haven't accepted a new JA in many years, and
decline 20+ inquires, annually.
But, the risk is just too great to take.
 

#7
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"He's the cowboy type and I anticipate a barrage of "why the hell not" etc."

Then show him what a real cowboy is. Look him in the eyes and tell him that you don't need an excuse. No means no.

After you swig your bourbon of course...
 

#8
HowardS  
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High noon...at the CPA corral.

After you give him your EFIN he'd probably like your SSN, EIN, wife and first born child.
I would draw the line at letting him use my golf clubs.
I suffer from depreciation.
 

#9
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Change your negotiation style. Shift everything to a no question. For example, do you want me to risk my EFIN status with the IRS? If that happens, do you want me to leave my clients in the lurch? If something goes wrong, how am I going to support my employees, what do I do if I need to lay them off even temporarily to fix a problem? Etc...

Even a jerk is usually going to say “no” and in this case, back away.
 

#10
ATSMAN  
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If you read the IRS newswire etc. there is heightened awareness of PTIN and EFIN being hijacked to file fraudulent tax returns. You can't loan those to anyone! I check my online account every season for the # of returns filed and match it up.
 

#11
Tax_Man  
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This is an easy, not on you life, NNNNOOO! The EFIN and PTIN was assigned to you. If you let someone use it, you are on the hook. I do not know the code site, rule number, etc. It is just common sense in my opinion. There is a way to say it so as not to ruin a relationship. Based on what I read, that is not the case. Could be wrong.


EDIT: It was my opinion... and I admit I did not consider all aspects. Seems in a new response there is a good relationship. Again, if I read it right. Myself, I wouldn't, but.. See below for additional..
Last edited by Tax_Man on 10-Jan-2021 2:56pm, edited 1 time in total.
Enrolled Agent
16 years with IRS (retired in 2019 with 32 years Government service). 15 years business consulting.
If you are not having fun in your career, change your career...
 

#12
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Thanks so much for all of the replies and concern.


novacpa wrote:When you worked for him, how did he treat you?
In my career I've trained - close to 15 Junior Accountants,
and it is tedious work - a labor of love.
I haven't accepted a new JA in many years, and
decline 20+ inquires, annually.


Not only was he generous with his money and time, he is perhaps the most generous I've ever met.

He groomed me to go off on my own, and he overpaid me (over market rates) while he did it.

Then he let me help him even after I hung a shingle so I could cover my new office expenses. Never a word about trust or stealing his clients.

I could go on, but I'll save us time and stop there. He's a diamond of a human being, other than being loose cannon.

The answer is easily no, of course, and if he denounces our relationship, I will know that I did what I needed to do.

But the question is how to say it to possibly save the relationship.

HenryDavid wrote:Change your negotiation style. Shift everything to a no question. For example, do you want me to risk my EFIN status with the IRS?


I like it. He feels a sense of pride in my financial success specifically. That's what I will shift to a "no" question.

But he will still argue "where does it say" that I can get in trouble as a result of letting him file his tax returns under my EFIN.

Do I NEED an answer? No. I'm not risking my practice or compromising my ethics either way.
 

#13
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ItDepends wrote:But he will still argue "where does it say" that I can get in trouble as a result of letting him file his tax returns under my EFIN.


An EFIN is assigned to ONE business, for use at ONE location. Pub 3112 makes that clear.
 

#14
Tax_Man  
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You could let him use it. If you choose. However, you might need a second EFIN for an additional location. Review Rev.Proc 2007-40 Sec 5 and Sec 6. Pub 3112. It is your EFIN and ultimately responsible.

I can't see anywhere that says it is prohibited.
Enrolled Agent
16 years with IRS (retired in 2019 with 32 years Government service). 15 years business consulting.
If you are not having fun in your career, change your career...
 

#15
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It sounds like he was a good guy to you, and you want to do him a solid, so when you “negotiate” with him, offer to help him get set up when you tell him that allowing him to use your EFIN would be a significant risk to your livelihood, etc.
 

#16
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It Depends, I worked for a CPA who had issues with authority, some of which is detailed on this board. It caused me angst for a long time. If Henry David had offered me the advice he offered you above, I hope I would have had the courage to act on it. The big difference between you and me is that you have, by the sound of it, a long personal relationship with this person.

Does he have his own practice with employees or is he completely solo?
 

#17
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SumwunLost wrote:
Does he have his own practice with employees or is he completely solo?


Several employees, one is a preparer.
 

#18
Taxaway  
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Tell him you appreciate all he's done for you, particularly instilling a sense of professional ethics and doing the right thing, even when it involves saying no.
 

#19
CathysTaxes  
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ItDepends wrote:
SumwunLost wrote:
Does he have his own practice with employees or is he completely solo?


Several employees, one is a preparer.


Then he should have his employee get the EFIN.
Cathy
CathysTaxes
 

#20
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CathysTaxes wrote:
ItDepends wrote:
SumwunLost wrote:
Does he have his own practice with employees or is he completely solo?


Several employees, one is a preparer.


Then he should have his employee get the EFIN.


Seems like the did that last year and the IRS told the employee to stop. Not sure of the details.
 

#21
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[/quote] Several employees, one is a preparer.[/quote]

So there is no question of you employing him and signing off on his returns, after a proper review by you. It seems to me that you cannot help him, no matter how much you might want to. Good luck in navigating this unfortunate situation.
 

#22
CathysTaxes  
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Oh my! IRS tells him to stop using employee's EFIN so he wants to use yours? Since he's a close friend to you, my only suggestion is that he makes you a full partner.
Cathy
CathysTaxes
 

#23
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ItDepends wrote:According to him, the case was total BS and he re-applied for his CPA and the board approved it.


Have you confirmed this?

Most states make the status of CPA licenses public information.

It doesn't appear that Hawaii is any different:

https://pvl.ehawaii.gov/pvlsearch/captcha/index.html

Either way, it stinks to high heaven. If he doesn't have a PTIN, what is he putting in the paid preparer section?
 

#24
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It wreaks, yes. There's no way I would even consider being involved in it.

Just looking to turn him down in a way that saves the relationship.

If I can't, I will be disappointed, but I won't feel guilty, knowing that I had no choice based on the risk and the ethics.
 

#25
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It wreaks and it reeks.
 

#26
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:lol:
 

#27
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As it turns out, he's still not allowed to have an EFIN.

He says he has a PTIN, but has been advised not to use it.

I told him he can't file under mine. He's frustrated but he understands.

He has 2 clients for which he wants me to file taxes as they need filings to get their pending loans.

Am I at risk if I COMPLETELY engage with these clients on my own? For example, I collect their documents, 8879 signatures, engagement agreements, delivery of copies - the whole thing. Just take them.

I'm not worried about the preparation fees, but I want to bring this up because it may be a circumstantial factor:

One of these clients already paid him - it's a 2019 tax return that should have been filed a while ago.

The other is an admin employee of his - and there is no fee.

Thanks for your advice.
 

#28
novacpa  
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What did he do to cause all of this angst?
Do you know the facts?
Was he debarred by the IRS Office of Professional Conduct.
Was he or does he expect to be indicted by the Grand Jury?
How is he making ends meet?
 

#29
ATSMAN  
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He has 2 clients for which he wants me to file taxes as they need filings to get their pending loans.

Am I at risk if I COMPLETELY engage with these clients on my own? For example, I collect their documents, 8879 signatures, engagement agreements, delivery of copies - the whole thing. Just take them.


If he tells these two clients to engage you as their tax preparer and you use your EFIN and PTIN, then you are ok. This assumes that you will do your due diligence that you typically do for your own tax clients.

As for splitting the prep fee, that is no concern of IRS it is up to you guys :mrgreen:
 

#30
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Thanks, yes.

I'm not sure of his status. As far as I know, it is for a charge brought against him that is completely unrelated to taxes or his practice.

I've read about how you are not supposed to provide help or aide to a practitioner who has been sanctioned or censured in any way.

I also don't see how engaging 100% directly with (taking) his former clients will be a problem - just because I used to work for him years ago...
 

#31
sjrcpa  
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ItDepends wrote:As far as I know, it is for a charge brought against him that is completely unrelated to taxes or his practice.

Such as a felony?
 

#32
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I'm assuming, yes. It's awkward to ask him, and I've already refused to allow him to file under my EFIN.

But if his former client goes to H&R Block - it's not like H&R Block is considered to be helping him, right?

These would be totally separated engagements that does not involve him or his firm at all.
 

#33
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I told him no, and that I wouldn't help him with anything.

I was losing sleep over it.

My ability to practice is too large a part of my life.
 

#34
ATSMAN  
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ItDepends wrote:I told him no, and that I wouldn't help him with anything.

I was losing sleep over it.

My ability to practice is too large a part of my life.


Check this out man!

https://jr1040assist.com/

They provide a EFIN if you use their software


$499.99
We furnish all this!

Professional Tax Software
EFIN (Electronic Filing Identification Number)
Bank Product Enrollment
 

#35
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Wow, thanks ATS
 


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