You are a certified public accountant. A client enters your office on April 14 w

Question

You are a certified public accountant. A client enters your office on April 14 with a bag full of disorganized documents and receipts. He asks you to prepare his tax return and would be happy to file an extension. However, the client expresses some urgency and would like to file the actual tax return as soon as possible because he says, “I should get a refund for all the huge deductions.” When looking through the client’s documents and compiling the tax return, you realize that there are not enough supporting documents for deductions that would result in a refund. Suggest an alternate solution to communicate to the client.

Explanation / Answer

Circular 230, Section 10.22 says that due diligence must be shown when preparing and even assisting in filing tax returns and that all oral and written documents to the Department of the Treasury and IRS are correct. Section 10.33 talks about making sure the client has a clear understand of the laws and what is being prepared on their behalf. In order to follow the regulations, I would need to advise my client that I needed more supporting documents to file the taxes on their behalf. The client would then have the opportunity to bring me the documents needed. If the client is able to bring me such documents, then I would go over them and see what refunds he was able to get. If the client wasn’t able to provide those than I would not be able to filethe return. If the client decides to take his business to another CPA than I would make sure it was done.

Thanks

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