Disagreement on Tax Matters

I thought about posting this on PFZ, but decided there are broad enough questions raised beyond just the international aspects to put it here. Read the article and ponder the issues it raises for preparers and advisers. https://www.inquirer.com/business/tax-d ... 10430.html

Let me know if the link does not work.

First thought is what happened to the Forms 8879 or equivalent.

Next thought is this: were there clear expectations regarding billing and payment for professional services? Did the fee notes properly identify the work undertaken?

Looking at this in the most charitable way to each side, I'd say there was a monumental breakdown in communication.

Sounds like they're never going to get to the bottom of what actually happened until the former partner talks, either voluntarily or by being compelled...

1. Client blatantly lies & cheats on his taxes and otherwise does not give a crap.
2. Tax partner produces massive tax bill for client and refuses to submit the bs return
3. Client refuses to pay tax bill and just starts arguing with the tax partner
4. Firm ignores the issue because it is making $$$ from the client from audit & consulting services
5. Client gets audited by the IRS
6. Taxpayer pins it on the tax partner
7. Tax partner resigns
8. Firm throws tax partner under the bus.

If the firm is auditing the financials, presumably the tax returns should be clean and materially accurate. Where is the "bs return" coming from?

Couldn't the partner just have processed for paper filing and sent to the client via courier with filing instructions if the client refused to e-sign the efile authorizations?

That seems like it would mitigate risk exposure for both the firm and the partner if the client was being uncooperative (at least as far as tax services are concerned).

I think however, it's more complicated than that based on the article. It sounds like informational returns were not filed for some or all of the foreign subs, and some or all of the foreign sub income wasn't picked up when it should have been. Perhaps the partner or the firm was out of their depth, who knows.

Good summary.

A nice break from data reconciliation from the tax documents.

So the client knew the tax partner did not submit the tax returns.

I never heard such a conflict on the tax matters and will follow the story.