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Billing of client who did not pay

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Level 1

I have a client that wanted 1040 (personal) and 1041(estate) tax returned.

I completed and purchased my pay per return from intuit.

I fired and took back returns,  both are paper returns.  ie.  1040 was need a attachment for executor and 1041 executor mailing.  I charge for returns.  Client did not like prices.  I asked client to return returns..

I have not received them.

Two Questions  .  Can or Will Intuit return my pay per return?   Can Intuit notify IRS that my client may use my returns without payment to me?

 

Any Advice 

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Highlighted
Level 2

If you signed the return as a paid preparer, you can let the client know that you intend to write to the IRS to say that you were NOT paid, and to please remove your name and PTIN from any return filed by: (Insert clients and forms and Tax IDs).

You could also file a claim for theft, but generally this is not recommended, as the cost of filing, etc. is greater than any possible return. Chalk this one up to a "learning experience." Where you don't know the client, returns must be paid before you give the client the completed tax forms.

For the future, you need an engagement letter which the client should sign BEFORE you do the work. This includes your rates and possibly an estimated cost of preparing returns. There is usually a lot more in an engagement letter but it functions as a contract.

For new clients, you can also ask for a retainer which would at least cover your out of pocket fees. If you lose any potential clients, this would be better than being stiffed.

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4 Replies 4
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Level 9
Level 9

The answer to both questions is no.

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Level 15
Level 15

No and no.  Consider it a lesson on getting paid up front for work youve done, or at least agree upon a price prior to releasing copies to a client.

You could hire a collection agency to try and collect from the client, but you may need a signed engagement letter for them to be able to help as well.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
Highlighted
Level 15

"Can Intuit notify IRS that my client may use my returns without payment to me?"

The IRS is only concerned whether or not the returns are accurate, they really don't care if someone didn't pay for them.  Note to self - give an estimate of the cost before you start preparing the return next time.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
Highlighted
Level 2

If you signed the return as a paid preparer, you can let the client know that you intend to write to the IRS to say that you were NOT paid, and to please remove your name and PTIN from any return filed by: (Insert clients and forms and Tax IDs).

You could also file a claim for theft, but generally this is not recommended, as the cost of filing, etc. is greater than any possible return. Chalk this one up to a "learning experience." Where you don't know the client, returns must be paid before you give the client the completed tax forms.

For the future, you need an engagement letter which the client should sign BEFORE you do the work. This includes your rates and possibly an estimated cost of preparing returns. There is usually a lot more in an engagement letter but it functions as a contract.

For new clients, you can also ask for a retainer which would at least cover your out of pocket fees. If you lose any potential clients, this would be better than being stiffed.

View solution in original post