- 1 Is Your Hourly CPA Ripping You Off on International Tax Prep?
- 2 Get an Estimate Beforehand
- 3 Review Billings Along the Way
- 4 Will They Fix Their Mistakes for Free?
- 5 Will They Refund Hours for Incorrect Work?
- 6 Did You Miss Reporting in Prior Years?
- 7 Current Year vs. Prior Year Non-Compliance
- 8 Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)
- 9 Need Help Finding an Experienced Offshore Tax Attorney?
- 10 Golding & Golding: About Our International Tax Law Firm
Is Your Hourly CPA Ripping You Off on International Tax Prep?
Each year, we get approached by taxpayers worldwide (especially during tax season) who were duped by their CPA regarding the filing of international tax and expat-related tax preparation. Oftentimes, the situation arises when the CPA does not have the level of experience that they represent in their marketing materials, and in turn overcharge the client for fees that are not warranted, such as hours worth of “research and analysis” in an area of tax they claim to be experts in.
Generally, tax preparation is a flat-fee service. Experienced international tax accountants and lawyers are able to estimate what the fees should be in each case based on the thousands of cases that they have handled in the past. In recent years though, we have noticed a trend where less experienced accountants and CPAs goad taxpayers into entering into an hourly filing agreement based on their representation that the overall fees will be less than flat-fee firms.
What actually happens, is that the CPA/accountant begins ‘up-charging’ for unnecessary services — along with various hidden fees — that end up costing the taxpayer much more in fees than they were led to believe it would cost. Then, if the taxpayer does not replenish their retainer, they do not get access to their documents or if they do, the documents are incorrect and/or incomplete.
Here are a few tips to keep in mind if you are considering using an hourly CPA.
Get an Estimate Beforehand
Just because you may have agreed to enter into an hourly agreement does not mean that the CPA or Lawyer has carte blanche to continue running up the bill and charging you for unnecessary work — or grossly overestimating the amount of time it took them to complete a task. They should provide you with a ‘high’ and ‘low’ estimate for services performed before the project begins.
Review Billings Along the Way
With hourly billing, oftentimes what happens is the firm will use up the retainer and want you to immediately replenish the retainer in order for them to continue working on your case. At the time they seek a replenishment, you should ask for a full accounting for the amount of time it took them to prepare the work to date so that you have an idea of how much time has been spent and how far along the project they actually are.
Will They Fix Their Mistakes for Free?
If the tax accountant made mistakes (which happens to everyone) and now has to go back and fix all of their own mistakes, you should be sure to confirm with them first that they will be fixing these mistakes without charging you an additional fee because why would you be charged an additional fee for them to go back and expend time fixing the mistakes they made in the first place? We are finding some accountants and CPAs trying to shift blame to the client, in order to generate further unnecessary fees.
Will They Refund Hours for Incorrect Work?
If it turns out you decide you no longer want to move forward with the CPA, you should confirm with them that they will refund you for any fees paid on work that they prepared incorrectly, since there is nothing you can do with that work that they are prepared if it was done incorrectly and there is no reason why you should pay for that.
Did You Miss Reporting in Prior Years?
For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.
Current Year vs. Prior Year Non-Compliance
Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.
Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)
In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties.
Need Help Finding an Experienced Offshore Tax Attorney?
When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting.
Golding & Golding: About Our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure.
Contact our firm today for assistance.