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unpaid fees and the requirement to file corporate tax return

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#1
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5-Jan-2015 4:01pm
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Seattle
this question relates to unpaid fees.

I have a corporate client that has become very problematic, constantly arguing about owing taxes, my procedures to prepare books and related taxes.

My corporate client has a partner within that thinks he can get everything done for much less. I have terminated my engagement. I did not have an engagement letter.

My client owes outstanding fees. My client was informed by me that I will not sign and file the corporate return without first receiving the signed form 8879 and payment for all outstanding fees, which are reasonable and have a history of being paid in the past.

My client sent the signed form 8879 but no payment.

Do think I am obligated to sign and file the returns without full payment of outstanding fees as outlined in my letter to them?
 

#2
makbo  
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23-Apr-2014 3:44pm
Location:
District 13
Szoboszlay wrote:My client sent the signed form 8879 but no payment.

Do think I am obligated to sign and file the returns without full payment of outstanding fees as outlined in my letter to them?

No.

This topic has come up here before, usually in the context of individual 1040 filings, so you might want to search for those discussions to get a range of comments. The IRS pub has a reference to what I consider an obsolete rule about "stockpiling" from the early days of efile processing, but I believe the IRS is not interested in becoming involved as referee in a fee dispute between you and your client. (If you search, the term "stockpiling" is a good start.) The taxpayer can't force you to sign as the ERO. They may sue you or give you bad online reviews, but I don't think you risk any action from IRS.

It's too bad you didn't have an engagement letter spelling out this expectation up front, you really should. Some here think engagement letters serve no purpose, but unless you live in Tiny Town where "everyone knows your name" and deals are done on a handshake, you need them in today's business environment.
 


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