Commonwealth Business Services, Inc.

Review: I was provided a quote for preparation of my 2012 tax return by this company's staff member [redacted] on March 4, 2013 -personal tax prep would be $ 300 and the business tax prep would be $ 450. I then gave my tax prep paperwork to the company on 4/4/13. My return number one was not completed until June 4, 2013. This company was informed that I have previously file chapter 13 bankruptcy and one of the conditions of the filing was that all future returns be filed "ON TIME" The owner [redacted] filed an extension and also guaranteed that he would file an abatement for me if I was ever charged any liabilities in the future with the IRS or State.When I received the bill the price I was quoted was tripled. When I indicated to Mr. [redacted] and his staff that I was quoted $300-Federal & $450 business, I was told by his staff member that my return took longer to review and prepare. #1. I was never informed that the price would be increasing and this company had my 2012 tax information for over two months. They refused to reduce and honor the price that I was quoted. I was never told that my taxes would be prepared by a non CPA employee of Mr. [redacted]. In addition to being charged for my tax returns by a "non-CPA", I was also so charged additional fees for Mr. [redacted] to review the work that his non-CPA employee prepared. I felt like this was "double dipping". I sent several emails to Mr. [redacted] to ask him to honor the quote I was given by his former employee because I was not provided with any heads up the original price I was quoted had almost tripled to $2100. He never returned any of my calls or emails. Then I was threaten by his staff member that if I do not pay the amount that monthly late charges will occur as well as my name being referred to a collection agency. Mr. [redacted] is a Revdex.com member and frequently does Small Business Tax workshops for the Fredericksburg, VA area. I feel that he is mis-representing himself and his company due to his shady customer service and billing policies.Desired Settlement: 1) Reduce 2013 tax preparation invoice and honor original price quoted $300 and $4502) Honor request by receiving letter from his company that they will file any abatement(s) on behalf of [redacted] and DKB Speech and Language Services, LLC if needed.3) To waive any late fees and not send my account to his collection agency.4) His company and my company settled this matter in mediation by the AAA & his company pay 80% of the cost if this issue is not resolved through the Revdex.com dispute.

Business

Response:

Dear Sir or Madam,

First, my apologies for taking some time to get back to you. As the customer is well aware, my father has been extremely ill and my wife is struggling with a difficult pregnancy which has kept me out of the office for a substantial time.

The allegations presented by the customer are completely false and misleading. As we will detail below, we may not have met the customer's expectations but it wasn't for lack of effort on our part. We do not believe that anyone in a similar situation would have been given a better result.

The customer requested a quote on the tax preparation for her business and her personal taxes. As we always do, we asked her what condition her business books were in. Many times during the quotation process, we have to modify our quote if it becomes necessary to redo or modify the books and records provided by the customer. I can attest that the above statement was made by myself to the customer. The books and records are the foundation to which the tax returns are prepared. I was personally assured by the customer and have several witnesses from our office that her books were in terrific shape as everything had been scanned into neat receipts and it would take "no time at all" for us to obtain a profit/loss and balance sheet in order to prepare the tax return. Thus, our original quote given to the customer on March 4, 2013 did not account for any additional time to prepare or modify her books and records.

Although the customer inquired about tax prep at the beginning of March, she failed to bring in her initial documents until April 4, 2013. (A mere 11 days before the deadline) Our engagement letter (See attached page 1 paragraph 3) which the customer signed states that "To ensure that your return will be completed by April 15, 2013, we must have all of your information to prepare your return by April 1, 2013." We explained to the customer that although we would attempt to get her return done on time, it was unlikely given the number of customers already ahead of her. Had her books and records been in order as she claimed, we may have been able to finish her return by April 15, 2013. As I mentioned already, she misrepresented the accuracy and completeness of her books which required additional time.

Her assertion that we did not prepare the return by April 15, 2013 is without merit as she continuously gave us additional information up until May 29, 2013. We had the return signed and ready for her on May 30, 2013....a 1 day turnaround!

We are an accounting and tax firm that maintains myself and several other CPA's on staff. However, most of our bookkeeping department are not CPA's. (As is the case in virtually every firm.) Our bookkeeping department maintains a staff of five extremely talented individuals who are very efficient and professional in their bookkeeping assignments. The customer never inquired as to the resume of every staff member in the organization and had she not misrepresented the completeness of her books, our bookkeeping department would have had minimal time or contact with the customer. Essentially, as our original quote assumed, our bookkeepers would have quickly prepared the necessary financials and turned them over to our tax department for preparation, review and signature.

When the customer brought in her documents, they were given to the bookkeeping department and assigned to Ms. [redacted]. Upon initial review, Ms. [redacted] noticed that the books, records and receipts were substantially incomplete. We informed the customer of this issue and told her that some additional time would be required to get the books into an accurate and complete fashion. As Ms. [redacted] began to look into items further she discovered that nothing was totaled, personal items were mixed in with business items. folders provided were mislabeled and a substantial number of items were missing. Thus began a month and a half of the customer bringing in additional stacks of documents which we had to go through page by page to find what was needed. (Most of the information was superfluous.) The customer would also argue on the phone with Ms. [redacted] that some missing information had already been provided. Eventually, the customer would find the information and bring it to us. However, despite this, Ms. [redacted] and the customer had to sit down in our conference room and go page by page through stacks of paperwork to prove to her that the items were still missing!! The customer would also not call ahead to inform us that she was bringing information by and instead would just show up at our office and wait for us until we were available. We told her on several occasions to please call ahead so we can accomodate her at the time of her arrival.

The customer continued to bring in or email additional receipts to us up until May 29, 2013. We can account for at least 57 emails from the customer. As you may imagine, this was an incredibly inefficient process. The price quoted was $450 for the preparation of her business tax return and we were able to discount our total tax prep and bookkeeping fees to $918.75. The quote on her personal tax preparation was $300 and we were able to discount our total fees for it to only be $600. Thus, this is not triple as the customer alleges. As part of our engagement letter, we include the following language "Our fees for services will be computed at our standard rates and will be billed as the work progressees." (See page 4, paragraph 3) The customer was given a copy of our current rates and was told specifically by me that the extra bookkeeping would be $75 per hour to which she agreed. The customer also signed both of our engagement letters which contain the language above. (page 3 attached) On several of her appearances in the office, we informed her of my father's illness and my frequent absence from the office. Despite this, I have left my father's hospital room on two separate occasions to come back to my office to work on this customer's taxes because she needed them completed immediately.

As you can imagine, this did take a lot of time due entirely to the disorganization of the customer. To minimize her bill, I opted to give her a courtesy discount which reflected 100% of all time incurred by myself. Thus, the time incurred on both invoices only reflected Ms. [redacted]'s time. To say we are "double dipping" as the customer alleges is entirely false. To add insult to injury, this customer scheduled an appointment the morning of May the 29th and called 5 minutes before her appointment time and rescheduled for the afternoon of the 29th. I had originally planned on going to see my father that afternoon but instead waited for her to arrive. She arrived 90 minutes late for the afternoon appointment on the 29th. the customer, Ms. [redacted] and myself went over her books, records and tax returns in detail with her. We also went over the invoices with her and she agreed in our office that this was more than fair given her disorganized books/records. Although the returns had been assembled and were ready for her, she opted to give us one final receipt for a minimal amount. We informed her that we normally charge $75 to rerun a return but waived that fee as well since the charge would possibly be more than the tax savings resulting from the change. After her departure, I stayed late in the office rerunning her return so it would be ready for delivery on the next day, May 30, 2013. (Again, with no fees charged for my time)

We informed the customer that she may incur some penalties on her filings since they were not filed by April 15th and we offered to draft an abatement letter for her if these penalties were assessed. We explained to her that the letter may not be effective but it was worth a shot. We also explained that we normally charge for such a letter but we would be willing to do this on a complementary basis as a goodwill gesture on our ongoing future relationship. We also offered to look at her books/records for this year on a complementary basis and offered her a discount off our bookkeeping fees if she would get her books done in the summertime as opposed during the busy tax season. She informed us that she had hired a bookkeeper (not a CPA) who was cheaper. She told me that we were "too expensive." Her revelation that she would no longer be using us as an accountant essentially rendered both the complementary abatement letter and books/records review a moot point. I am truly amazed that she would still want us to provide additional services to her when we have already provided her all of my time for free.

We have a policy in our office which is displayed on a sign at reception that no returns are given to customers until they are paid. However, this customer was given the unusual benefit of taking her returns with her for review without payment. She returned her signed efile forms to us...assuming we would file them immediately to which we told her we could not electronically file the returns until the invoice was paid. This customer made no attempt to pay any amount on her return and instead proceeded to argue over the bill. She asked our receptionist for someone in charge of billings and Ms. [redacted] spoke to her. The customer began arguing over these discounted charges that she had already agreed to pay. Ms. [redacted] never raised her voice to the customer and just simply reiterated that she had already been given an extreme discount given the work provided and that we could not file her tax returns until the invoices were paid. Such delay in payment could result in additional penalties and interest from the IRS!. Ms. [redacted] explained to her that there was no way for us to discount this any more since all of my time had already been removed. She screamed and yelled at Ms. [redacted] and stormed out of our office never paying us a dime. I can attest that the customer was the only one raising her voice as I was in the back office and could clearly hear the conversation. Since then, the customer has been sending me emails telling me that she was mistreated. (She was not aware that I was in the next room) She also wanted me to go over the bills with her...which I had already done and I normally do not do as we have two billing specialists who function in that capacity. Despite being told this, the customer has also dropped messages through our drop slot to me at night making similar requests. It has become a stalking situation and given my experience I do not believe any positive results can come out of a meeting with her given her repeated attempts to avoid payment for services. Plus, I simply just do not have the time given the current medical conditions of my two relatives.

Based upon the facts above, here is how we respond to customer's demands:

1) We will not reduce our fees any further since customer has already been given a substantial discount. Both of the invoices show our policy that a late fee of $50 plus 12% interest will be assessed for balances not paid in full within 30 days of invoice date. We will waive these fees if payment is received by July 17, 2013. The returns will be electronically filed as soon as payment in full is received.

2) We will not draft any abatement penalties on a complementary basis. That was an offer predicated on a future business relationship which will not occur. Please see the attached engagement letter (page 1, paragraph 6) which the client signed that states "Our fee does not include responding to inquires or examination by taxing authorities"

3) As indicated above, we will waive late fees if payment is received by July 17, 2013.

4) Normally, once an invoice goes over 30 days, we will offer to go through mediation. Our engagement letter states that fees charged by any mediators, arbitrators or the AAA shall be shared equally by all parties. (page 2 paragraph 6 and page 5 last 2 paragraphs) This was agreed to by the customer on May 29, 2013. Thus, our engagement letter would be in force if this issue is not resolved by the Revdex.com.

Once payment is made and the efile confirmation is received, we will be formally sending a disengagement letter to customer and her business and will never perform any additional tax, bookkeeping and/or financial services.

I am not certain why the customer would bring up the fact that we assist the Revdex.com in tax presentations. We were chosen by the IRS and the Revdex.com to do such presentations given our professionalism, experience, ability and track record with the Revdex.com. We have been in business for over 40 years and this is the first complaint we have ever received. I will say that the customer did come to the presentation, albeit late, creating a certain level of disruption. She also was the only person in the audience who left the presentation early, again creating a disruption.

Despite being in business for over forty years, we almost went out of business five years ago. This is because we were not requiring clients to pay for our services prior to delivering and electronically filing their returns. We had to change our policy essentially in order to get paid as people opted to ignore any and all methods of collection. Given my experience, this was probably the case here as well as I have seen this over and over again. The customer never complained about our invoices when we allowed her to take a copy of the return. Nor did she complain when she delivered the signed efile acknowledgements. Complaints only surfaced when she realized that her returns would not be filed until payment is made. Had we efiled these returns, we probably would never have received a complaint. However, we probably never would have been paid either. If there is anyone in this situation who is participating in shady business practices, it is the customer. She is the one who has neglected to pay for services (that have already been discounted) provided. As such, we thoroughly dispute any and all claims made by this customer.

Consumer

Response:

I have reviewed the offer made by the business in reference to complaint ID [redacted], and have determined that this proposed action would not resolve my complaint. For your reference, details of the offer I reviewed appear below.

[Provide details of why you are not satisfied with this resolution.]

Regards,

As the owner of the CPA firm, I felt it was Mr. [redacted]'s obligation to speak to the customer directly if there was an issues which in the way that services were rendered. His staff was rude and could not answer some of the tax questions. I continually asked to speak to Mr. [redacted] but they refused and wanted to again charge me a fee if I wanted to speak to him. Additionally, on the copies of my returns, there were numerous" inappropriate" messages about me on sticky notes that were hand written by [redacted] and given to Mr. [redacted]. This was very unprofessional. I would be glad to forward the sticky note messages. This is considered a"discreditable act" and a lack of "professional care" according the definition of the VBOA. Further, I also have the emails indicating that she-[redacted] had requested the same information multiple times that had already been given to her (e.g. children's social security numbers, college status etc.) This became quite annoying when the information was on the previous three year returns that were given to them.

In regards to this company filing an extension, they were told verbally and written documentation (chapter 13 discharge ) was given to them that I had filed chapter 13 that my return needed to be filed in a timely fashion under the terms of the chapter 13 agreement. Mr. [redacted] did not indicate that the return would not be ready until June due to personal reasons until I had inquired numerous times about the status if my return. Mr. [redacted] indicated at the review meeting (tax return review) that he would file any abatement(s) with the IRS and State because the my chapter 13 agreement -that any future returns must be filed on time. Now it appears that Mr. [redacted] is not willing to keep his original agreement. I am assuming that since he signed my returns, if I do receive any additional liabilities from the IRS or state, for not filing my returns on time, they will also contact his office as well.

My tax return was given to this company from the Neat receipts which created tax or expense reports with my receipt data. There were only minimal "loose" receipts that were given to Mr. [redacted]'s CPA company. Other documents that were given to this company during the course of my returns being prepared were not within my control due to the fact that these documents were sent to me after I had given this company my tax information.

In regards, to arriving late to the appointment, I had missed one appointment I had with Mr. [redacted] to review my return . I then immediately called and stopped by to reschedule the others. I am not sure why Mr. [redacted] would waive the fee for these appointments as this appointment was to review the return.

Once again, when the services went beyond the original quote I should of been kept informed by either Mr. [redacted] or by one of his staff members. My intentions are not to pay the services rendered, but since I due owe a large federal tax liability, as a small business owner, this is now a financial strain on my company.

I would like to have Mr. [redacted] to grant me a three month extension (October 10th) to pay off the amount of the 2013 tax preparation fees and waive any future late fees, penalties, and including this account to going to collections.

Last, if there are any possible errors and omissions on the tax return that may appear in the future prepared by this company and I might be audited by the IRS or state, I would like this company to agree that they will assist me in this audit as it is his "ethical duty" as a CPA with respect to errors and omissions. found on tax returns.

MISTAKES AND THE CPA’S ETHICAL OBLIGATIONS

While taxpayers have a legal duty within any applicable statute of limitations to pay the correct tax, neither the IRC nor the Treasury Regulations require them to unilaterally correct tax return submission errors or omissions. Instead, the regulations state that upon discovering an error or omission involving an understatement of income or an overstatement of deductions, a taxpayer “should” file an amended tax return and pay any tax due (Treas. Reg. §§ 1.451-1(a) and 1.461-1(a)(3)). In Badaracco Sr. v. Commissioner, 464 U.S. 386 (1984), the U.S. Supreme Court said that a taxpayer is under no legal obligation or duty to file an amended return even after an error or omission is discovered.

Ethical standards applicable to practitioners, moreover, make clear that ultimately the taxpayer, not the practitioner, must decide whether and how to correct an error. Section 10.21 of Treasury Circular 230, which dictates practice before the IRS for CPAs, attorneys, enrolled agents, enrolled retirement agents, and appraisers, instructs tax practitioners who know of an error or omission on a client’s tax return to promptly notify the client and advise the client of the consequences of such an error or omission under the Code and regulations.

Source:Journal of Accountancy-June 2010.

Regards,