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RE: Comfort Letter ~ Clients using TurboTax

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#1
TY20XX  
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IL
What do you guys do when a non-client that self-filed by themselves or DIY software, request for a income verification/comfort letter to submit to their lender?

If we prepared the return we wouldn't charge the client but that would be a different story for someone that self-filed.

Would you even take this on and how much would something like this cost?
 

#2
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22-Apr-2014 3:06pm
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WA State
I wouldn't even entertain this idea.
If they want a comfort letter, I'll need to have prepared a return for them.
~Captcook
 

#3
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673
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21-Apr-2014 7:09pm
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NC
CaptCook wrote:I wouldn't even entertain this idea.
If they want a comfort letter, I'll need to have prepared a return for them.


agreed. Only for clients and we charge for the letter. The letter brings more risk than any tax return.
 

#4
JAD  
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21-Apr-2014 8:58am
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California
I don't do comfort letters. I explain to my client that the companies that ask for them are looking to spread potential future liability, and my liability insurance carrier absolutely forbids it.

I will send a letter to the client to forward to anyone he/she wishes stating that I prepared a return, that I do not audit the client's information, and that they should do their own due diligence on making the loan.

Then I provide the client with the phone number to PenFed, which almost all of my clients have been very happy with.
 

#5
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SC
Nope.

And my "comfort letters" are so vague and turn everything back onto the lender. All they actually do is confirm that I prepared a tax return based on information furnished to me by our mutual client, and just as the tax returns indicate I did by being listed as the ERO. Never had a client denied because of how I write them, but I imagine I piss off and insult some bankers.
 

#6
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In the office
TY20XX wrote:What do you guys do when a non-client that self-filed by themselves or DIY software, request for a income verification/comfort letter to submit to their lender?


Absolutely not. Get them out the door ASAP. Waste of time. You can't charge enough for the risk.

TY20XX wrote:If we prepared the return we wouldn't charge the client...


Why not?

CornerstoneCPA wrote:And my "comfort letters" are so vague and turn everything back onto the lender. All they actually do is confirm that I prepared a tax return based on information furnished to me by our mutual client, and just as the tax returns indicate I did by being listed as the ERO.


Agree.

"Comfort letters" are just an attempt by the lender to have someone else to collect from should the deal go south.

The AICPA released a great FAQ on this issue (dated Oct 2013).
 

#7
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1067
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SC
And check with your E&O carrier. I have heard some do not provide coverage if you issue comfort letters. Mine follow the very templates provided by my E&O, so I am not concerned about the few I do issue.
 


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