CornerstoneCPA wrote:I'd at least notify E&O of the risk--mine requires me to notify them as soon as I find out of something that could lead to a claim (guessing sjrcpa and I use the same E&O). Simply notifying them does not do any harm with your rates.
My deductible is $1k, so it would be a situation of verifying the credit should have been claimed, then talking with the client instead of the new tax preparer, and weighing deductible and potentially higher E&O premiums vs. paying directly. For $2500, I would probably just pay the client. Do you know why the client left? That could come into play, as well, particularly if it was not an amicable split.
southparkcpa wrote:
An E mail is grounds for a potential claim? I would say not, if the client contacted me, I would agree.
But in my experience HOW THE HECK are we supposed to know if they bought a car worthy of a credit?
All clients of mine that purchased Electric vehicles have told me. Im curious how this over sight happened.
CornerstoneCPA wrote:southparkcpa wrote:
An E mail is grounds for a potential claim? I would say not, if the client contacted me, I would agree.
But in my experience HOW THE HECK are we supposed to know if they bought a car worthy of a credit?
All clients of mine that purchased Electric vehicles have told me. Im curious how this over sight happened.
The new tax preparer is the former client's paramour. That would be reason for me to think a claim could arise. If a truly independent tax preparer sent the e-mail, it is still "notice" that an E&O claim could arise since you are now aware of a potential mistake. That is why I said I would first want to verify eligibility for the credit. If valid, then I would alert E&O.
I've had clients claim they were entitled to vehicle credits when they clearly did not satisfy the requirements. Agree with you though, I've never had one NOT tell me if they purchased a vehicle (or anything else) that they believed entitled them to a credit--salesmen are fantastic at giving tax advice in an attempt to close a sale. I remember a salesman telling my client all the details of a Sec. 179 expense for their $100k Range Rover.
southparkcpa wrote:
or the "I bought an energy effcient washing machine and the sales person told me I can get a credit"......
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