JW Service Company

We were contacted by and met with the client during the fourth quarter of and were asked to assist them with restructuring their business entities as well as help with their tax filings and bookkeepingWe developed a complex plan with their attorney to create new companies and did
research to make sure this restructuring could be accomplished tax freeAfter the new companies were created in January 2015, we applied for new federal identification numbers for the companiesThe final step to the restructuring was to have the two shareholders transfer their stock to one of the new companiesFor the restructuring transaction services, we charged the client $on an invoice dated February 28, This invoice was paid on May 20th, nearly three months after issuance and we incurred nearly $in late payment charges that were not paid by the clientThe client also refused to sign an engagement letter for our services
During February, March and April, we finalized the company's Quickbooks accounting records and prepared the income tax returns for the company and its two shareholdersSignificant work went into understanding how they were reporting revenue and using foreign bank accounts (both personal and company accounts) and making sure we were properly identifying income to report as well as making the proper tax filings and disclosures to help the client avoid penalties of up to $50,
Later in (June or July), client contacted us about the status of the restructuringWe followed up with the attorney to see if the shareholders had transferred their stock in the company to the newly-formed companyThe attorney then sent us the information that the shares were transferred earlier in the yearSince we were not made aware of the transfer, we did not complete the final step of the restructuring transactionAfter learning of the transfer that took place earlier in the year, we immediately began working on the final step of the restructuringDue to the timing of the events, we were required to file for late election relief for an S corporation electionThe IRS rules permit taxpayers to make these elections late under these types of situations, where the election is late due to no fault of the taxpayerWe issued an invoice for $to complete the final step of the restructuring and this invoice has not been paid and we later agreed to retract the invoice
When the final step was completed and the QSSS and S corporation election was prepared and filed, we inadvertently used the same federal identification number on both the parent corporation and the subsidiary corporationWhen we were notified by the client that the IRS did not accept the election due to the discrepancy involving the identification numbers in February 2016, we offered to contact the IRS and correct the mistake at no additional charge to the clientThe client refused our help
With regard to the original complaint, the client mentioned "during that switch we noticed Dave did not save any receipts from the IRS pertaining to the new businesses he created." We strongly oppose this statementFirst, the IRS does not send receipts or any information to taxpayers' accountants without having a power of attorney on fileAll IRS documentation is sent to the taxpayer ONLY, and we had no power of attorney with the client to receive any information about their business from the IRSIn addition, Bruner Cox is an accounting firm and we did not "create" any new businessesThis work was performed by the attorneyWe are not permitted to practice law
We also strongly disagree with the statement that the client has received no response regarding settlement after multiple emailsAs a response to Mr***'s email dated June 19, 2016, we responded on July 5, 2016, indicating Bruner-Cox is no longer in business and has been acquired by another accounting firmWe were not able to access our prior files due to the acquisition of Bruner-Cox and the transfer of technology and files to the new firmFurther, we responded indicating we would reimburse the company $850, which represents the fees received for the restructuring project, as a good faith settlementIn an email dated July 5, 2016, Mr*** declined our settlement offer to basically reimburse him for all of the fees paid for the services causing the disputeIn addition, we feel the amount of $is excessive for resolution of this matter and does not represent the actual fees incurred by the other firm related to this matter, especially in light of the fact we offered to fix it at no cost