Tax Question and Advice! - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

albertGQ · 09-17-2010, 09:30 AM

So I was wondering if I have any options in this scenario.

I used to do my own taxes, but I am now married with a kid. I figured my taxes would be a lot more complex than what I’m used to so I hired someone to do my 2009 taxes. My dad has been going to this old East Indian guy in Castleridge for decades. He passed away recently and his son and two grandsons has taken over the business. They all have certificates, diplomas, and/or degrees hanging from their walls, so they do have the experience to do taxes as well. When my wife and I made our appointment, we ended up getting one of the young guys. This guy looked like he was in his early 20’s. I should’ve been skeptical when I was correcting him a couple times while he was doing our taxes.

To make a long story short, I ended up getting a return of over $4k. I was surprised that I was getting this much as I expected under $1k. Regardless, I took the money and paid off a Vegas trip, paid Troutman for doing our will, and gave a chunk to Slava for my RRSPs

I got a notice a couple months ago from the CRA that there was an error in one of my claims. This is where I’m confused. I told the young accountant that if it was beneficial to us as a family, I would like to claim my son as my dependent. Not sure how or what he did, but the government did not agree with something. As a result, they calculated that I should’ve gotten only around $800 back. They charged me about $60 in interest and if I didn’t pay them $3285 by September 27th, they’d start charging more interest

So do I have any options? I’m guessing I’m liable for the taxes owing and the most I can do is call my accountant and see if he would cover the interest that was accrued. I’m hoping for the best but preparing for the worse. I’m assuming I have no way to get the accountant to foot part of the bill since it was his error?

Am I screwed up the poop chute or what?

Shazam · 09-17-2010, 09:32 AM

Niiice.

You can always appeal. But he probably pooped your return, so you're out of luck.

PM me if you want to use my accountant, who doesn't screw up people's stuff.

JiriHrdina · 09-17-2010, 09:47 AM

You might be able to get the accountant to refund a portion of their bill to you - but nothing more than that.

Slava · 09-17-2010, 09:48 AM

Brutal! I would start by having a conversation with the accountant. Pretty clearly there was an error made and he ought to have errors and ommissions insurance for just such an occassion?

I'm not an accountant (as you know), but I would think that there is a reason they sign the return to say it was prepared by a professional?

squiggs96 · 09-17-2010, 09:50 AM

You may be able to get the firm to pay for the fine and/or interest if you can prove they were negligent on filing your return. As for the $3,285, you are definitely on the hook for that. It was never your money in the first place, so you do not have a claim to it. It's not a fine or interest amount, so you shouldn't feel wronged. It's similar to if the bank put $4,000 in your bank account by accident, you spent it and then they realized their error and wanted it back. Whether the accountant was right or wrong, you are still ultimately responsible for your asessment. If you thought you were only supposed to get back $1,000, you probably should have waited for the notice of assessment before spending the excess amount. Yes I know it is easier to say that after the fact. Did you bring up this concern with the accountant at the time? Not criticizing, just wondering.

CA

troutman · 09-17-2010, 09:52 AM

I agree with squiggs. The acct might be willing to do more to re-build your goodwill.

SportsJunky · 09-17-2010, 09:56 AM

I blame troutman and Slava.

Table 5 · 09-17-2010, 09:57 AM

Are all accounting questions to be written in blue now?

loob job · 09-17-2010, 09:57 AM

Definitely go after the accountant for the penalty and interest. I used to work in a CA firm and that came up a few times. If it was their error they will have no problem paying the penalty and interest.

Slava · 09-17-2010, 10:15 AM

Quote:

Originally Posted by squiggs96

You may be able to get the firm to pay for the fine and/or interest if you can prove they were negligent on filing your return. As for the $3,285, you are definitely on the hook for that. It was never your money in the first place, so you do not have a claim to it. It's not a fine or interest amount, so you shouldn't feel wronged. It's similar to if the bank put $4,000 in your bank account by accident, you spent it and then they realized their error and wanted it back. Whether the accountant was right or wrong, you are still ultimately responsible for your asessment. If you thought you were only supposed to get back $1,000, you probably should have waited for the notice of assessment before spending the excess amount. Yes I know it is easier to say that after the fact. Did you bring up this concern with the accountant at the time? Not criticizing, just wondering.

CA

Is that really the case though? If you have the return prepared professionaly and they make an error there has to be some liability for them? At the very least I could see that being the interest accrued until they were notified of their error.

Obviously from a CRA point of view they just want their money back, and I understand that. In this case Albertgq took the appropriate steps and was led to believe it was all correct...I have a hard time thinking that the accounting firm would be off the hook here.

VladtheImpaler · 09-17-2010, 10:20 AM

I have a good friend who is a CPA and worked for CRA for 17 years. For the last 11+ he's been a tax lawyer, so if you have any serious issues or tax planning questions, PM me, and I'll hook you up. In line with Albert's issue, I have a general question - at what point is an accountant necessary? I think QuickTax (or whatever) is adequate for the vast majority of us, and seems to handle all the usual scenarios (kids, investments, real estate, etc).

albertGQ · 09-17-2010, 10:49 AM

There was no penalty. Just the $60 interest. I think its almost a waste of my time to try and recoup that. I might just suck it up and pay the whole thing myself but I think I should call them to inform them of their massive error. Its not like I have the money available to pay this so I will have to use my LOC.

I should've just gone to Locke, but he charged more then this hobo

JiriHrdina · 09-17-2010, 11:15 AM

Quote:

Originally Posted by VladtheImpaler

I have a good friend who is a CPA and worked for CRA for 17 years. For the last 11+ he's been a tax lawyer, so if you have any serious issues or tax planning questions, PM me, and I'll hook you up. In line with Albert's issue, I have a general question - at what point is an accountant necessary? I think QuickTax (or whatever) is adequate for the vast majority of us, and seems to handle all the usual scenarios (kids, investments, real estate, etc).

Depends on your comfort level - the programs are indeed pretty easy to use even for some of the complex items.

But some people like he peace of mind of just handing everything over to someone.

Ducay · 09-17-2010, 11:23 AM

Jesus dude, as you said, its just $60 interest. That money is not worth going back to that company for.

Consider it money well spent and avoid these guys like the plague. You're better off doing it yourself anyway.

Slava · 09-17-2010, 11:24 AM

Quote:

Originally Posted by Ducay

Jesus dude, as you said, its just $60 interest. That money is not worth going back to that company for.

Consider it money well spent and avoid these guys like the plague. You're better off doing it yourself anyway.

Its more than $60 though...its the other $3k that I would be at least asking about.

troutman · 09-17-2010, 11:27 AM

Quote:

Originally Posted by Slava

Its more than $60 though...its the other $3k that I would be at least asking about.

Despite the acct's error, the $3K was a windfall.

Slava · 09-17-2010, 11:28 AM

Quote:

Originally Posted by troutman

Despite the acct's error, the $3K was a windfall.

Right, but isn't there some kind of legal concept similar to estoppel in operation here?

Ducay · 09-17-2010, 11:28 AM

Quote:

Originally Posted by Slava

Its more than $60 though...its the other $3k that I would be at least asking about.

No way. It was a calculation error. OP owes this amount and would have had to pay this amount regardless. Sure he feels ripped, but he's only out $60.

Its not like because of the error he owes $3.2k, its because this error he owes $60. He just got to earn interest on the $3.2k for a few months.

Slava · 09-17-2010, 11:32 AM

Quote:

Originally Posted by Ducay

No way. It was a calculation error. OP owes this amount and would have had to pay this amount regardless. Sure he feels ripped, but he's only out $60.

Its not like because of the error he owes $3.2k, its because this error he owes $60. He just got to earn interest on the $3.2k for a few months.

I guess you're right and the more I think about it I'm wrong. I just can't help but think that the accountant owes him in this case.

Bertuzzied · 09-17-2010, 11:34 AM

Who cares about the penalty. Arent' you going to get audited for the next 7 years?