Can an accountant do this to me?

[Monkeyleg]

In a thread from a couple of weeks ago, I detailed how my accountant screwed up my taxes and threatened me.

Yesterday I contacted the IRS to get some answers to a payroll question and found out that they didn't have a 940 Federal Unemployment Tax (FUTA) return on file for me for 2009. I paid the tax, but they had no return, so I filed one just to cover things.

I then asked my wife to call my former accountant's office to ask if she could stop by and pick up all of our papers--withholding tax returns, W-2's (he never gave me copies for my records), work sheets for tax returns, etc.

The office manager answered the phone and was very pleasant to my wife until my wife said my name. Then she got very serious and said my wife should speak to my accountant, the owner of the firm. He told her that everything had been shredded.

I can't believe that it would be legal for him to shred twenty years of my records. If the IRS wanted a copy of any payroll withholding return for 1990 to 2009, I wouldn't be able to give it to them. If they had questions about how an item on one of my corporate returns was calculated, I'd have no way of explaining it.

Does anyone here know anything about rules for accountants?

[PTK]

 

I don't know, but HOLY MOLY. That's all sorts of bad. What a complete dirtbag, to do that. 

[BMacklem]

Considering that corporations are required to keep at minimum 5 years of payroll and tax info, your former accountant is legally responsible for keeping at minimum those copies of your records. Since he never gave you copies of your returns, he is the one you can sue should you decide to do so.
Would it be worth it at this point with you moving out of state? I don't know, but I certainly would contact a real tax lawyer, and see if you have a case, or at least what your options are should you be audited by the IRS.

[Marnoot]

Ditto on getting a consultation with a tax lawyer to talk about this.

[Fly320s]

Shredding 20 years of records is flat-out wrong if not illegal without your express permission.

Even as an individual the IRS encourages (maybe requires for all I know) that a person keep his records for 7 years.

[sanglant]

does your state have one of these?
http://www.icpas.org/hc-tax.aspx?id=2630
might be fun hmm, i wonder if NC has one.

[Tallpine]

Does anyone here know anything about rules for accountants?

"Accountant" is just a generic term.

Is he a CPA, IRS Registered Agent, or what...?

If he is a CPA, then you might get his state license pulled and get him kicked out of the state CPA society for ethics violations.

When I was in public practice, I was a member of another non-CPA organization with its own ethics rules.  The reason I didn't go the CPA route after graduation was because I had a young family and health problems, and I would have had to spent two years mostly traveling doing audits.  With my health at that time, I absolutely had to control my environment and not be working in smoky casinos, etc :(


I hate to say this, but I think your "accountant" is more than just PO'd with you.  I think he is hiding something.  You might want to consider moving farther than Alabama - like someplace that doesn't do US extraditions 

[lupinus]

I'd be contacting whatever state and ethics boards are available, as well as a qualified lawyer. Not only do you have federal regulations to worry about but possibly state as well. He damn sure did things which were unethical so I'd pursue him through the proper organizations for ethics violations. If he did anything that proves criminal or liable I'd do everything in my power to nail his ass to the wall there as well. Depending on his license he may well be required to keep records back a certain number of years.

At the same time I'd be obtaining copies of as many tax documents as possible. I'm not sure how far back but you can get transcripts of previous tax returns from the IRS- http://www.irs.gov/individuals/article/0,,id=110571,00.html I would also look at whatever state level agencies a state tax return would have been filed with and see if you can get transcripts from them as well. While at it let them know the story, they may be a good source on who to sick on him. I'd also go to employers, banks, etc. and get as many previous tax documents from them as they still have on file. You may not be able to get your entire history back but you should hopefully be able to at least rebuild some of it.

If you are able to get any records from him, I'd still obtain as much as possible myself and compare. If he was required to keep the records and you sick licensing boards and such on him, some "shredded" records might magically reappear. If so, I'd still get as many document copies as possible so that I could have my new accountant review and make sure everything was on the up and up. If you can't get records out of him I'd still have an accountant review the documents obtained with the transcripts to make sure everything was done properly.

[RocketMan]

Were I you, I'd be doing everything legally within my ability to nail his hide to the wall.  I'd be talking to tax lawyers and the appropriate organizations that regulate his field.
What he did was flat out wrong.  If he did that to you, Dick, he could be doing it to other people as well.  He needs to be shut down, put out of business, so he can't screw anyone else.  And hopefully you can get some sort of recompense, as well.

[lupinus]

Just on another note to add to his personal pain, I'd be sure to also look into filing a lawsuit against him for any fees, expenses, or damages you pay out as a result of his actions. Penalties should you be audited, costs to get replacement documents, etc. including legal fees for the suit itself. Is it just that the IRS didn't have the document or did they never receive it or the payment? That's an even bigger can of worms for him legally and you financially.

As I recall this all started when you helped him out by fixing an error yourself, which he considered going over his head and which started his dickheadary. So not only are his actions unethical, they're also malicious in my IANAL opinion as they are in reaction to your perfectly reasonable action.

Also, I find it interesting in itself he never gave you copies. I typically do my own taxes but the years I did have my taxes prepared for me they always gave me a copy. I didn't even have to ask for them, they just did it as a matter of course. They kept a copy for their records and stuck a copy in my hand. Maybe this isn't typical and I've just had abnormal experience, but I find it odd he didn't provide you a copy at the time your taxes were done.

[MillCreek]

As I mentioned before in the earlier thread, I would be calling the accountancy licensing/disciplinary board in your state.  If they take action against his license, it positions you well for any subsequent errors and omissions lawsuit.

[Monkeyleg]

He might be toying with me, as he told my wife to call him after April 19th so he can look to see if the records were kept.

I got copies of my annual personal and corporate returns, but never my copies of W-2's or 941, 940, and other withholding tax forms.

There's enough to deal with right now with our moving, but I guess the least I should do is get copies from the IRS of everything he filed (assuming he did shred things).

Tallpine, why would I want to run? He's the one who screwed up.

[Brad Johnson]

I'd be contacting whatever state and ethics boards are available, as well as a qualified lawyer.

Ditto times elebenty bizillion.

Brad

[Zardozimo Oprah Bannedalas]

why would I want to run? He's the one who screwed up.

We don't want you to be our Wesley Snipes.

[Monkeyleg]

Man, I wouldn't want to be Wesley Snipes, and it has nothing to do with his taxes.

[Tallpine]

Tallpine, why would I want to run? He's the one who screwed up.

Just sorta kidding 

Did you carefully read all the forms that he prepared and that you signed?

Actually, he is the one that would probably run, leaving you to "pay the bill" 


BTW, I still have my copies of client records from 15 years back, just in case - although a couple months back I was thinking about burning them.  But I had some pretty flaky clients - in fact most of them, which is why I quit the business.  It's hard getting started in a small town.  About the only people who come to the new guy are the ones that every other acct in town has run off already. 

[Waitone]

I don't think he was so stupid as to really shred your returns.  It may be a ploy to put you off until after tax season. 

That said, this dood is flirting around the edges of criminal tax actions.  You don't want to be involved.  I'd invest a couple skins in a tax lawyer to learn about reality.  Be prepared to spend money.  IIRC law has only two specialties:  patent law and tax law.

[bedlamite]

Lawyer. Now.

[wmenorr67]

Lawyer even more important since you are moving.

[Hawkmoon]

Shredding 20 years of records is flat-out wrong if not illegal without your express permission.

Even as an individual the IRS encourages (maybe requires for all I know) that a person keep his records for 7 years.

IANAL, but every year the copy of my income tax return I get from the accountant has a cover letter saying in (IIRC) bold-face type, "We recommend that you retain this copy indefinitely."

Your former accountant is covering up, and urgently needs to be reported to your state's licensing board for investigation and further action/sanctions.

[Monkeyleg]

Another wrinkle in the accountant case today.

We close on our current house on Thursday (tomorrow). Movers come on Friday, we close in the house in Alabama on Monday.

The AL mortgage company needed to do a routine check to make sure I was still employed. Since I'm self-employed, the processor called my accountant, as his name and phone number was on the tax return. He said, "Dick was self-employed as of December 31, 2009" and then hung up on the processor.

The loan officer called me, and she sounded shook up, which of course shook me up. I explained my recent history with the accountant and she was shocked. I suggested she call some vendors of mine, but she didn't care for that idea. She looked up my records with the state of WI and saw that I'd been incorporated since the 1990's, passed that on to the processor, and everything was ok.

I haven't had time to talk to a lawyer, but after this stunt today, I'm definitely going to do so. For an hour or so it looked like we'd have our household packed into a moving truck with nowhere to go because of him.

I did have time to check with the state regulation department, and it turns out he's not a CPA. His father was. They don't have any record of him at all, which may make this really interesting.

[cassandra and sara's daddy]

is he billing himself as a cpa? might be time to get dpor on the horn. or have the lawyer offer to settle in exchange for not pursuing a case/claim

[AmbulanceDriver]

I did have time to check with the state regulation department, and it turns out he's not a CPA. His father was. They don't have any record of him at all, which may make this really interesting.

That may very well be the motive behind his shenanigans

[MillCreek]

I wonder if he has errors and omissions (malpractice) insurance.

[Scout26]

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I think someone already said this, but it bears repeating:


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