I called my CPA yesterday to ask him a question and found he no longer works at the firm. I called him personally last night and had a nice discussion and found where he is working now. He told me he had to sign a no compete clause when he left. I can go to the firm where he is now, but he can't do my taxes. Does this sound normal? A bigger firm and bought out where he worked and the personal touch is no longer there. Any one else ever run into this where the person that has been doing your taxes says he can't for the same reason?
- Thread starter Gary H.
- Start date
Yup. About 15 years ago, the little gal that was doing ours for a local firm quit and went out on her own. The firm assigned a new idiot who had no idea about farm taxes and depreciation, etc. We went to Laura and she said she couldn't do them because of a non compete clause. We went to her the next year and she was able to do them. SWMBO took a tax course the next year and has been doing them since for far less than we paid before, and with the same results. Tax preppers have one of the biggest rackets going......
Dave H (MI)
Well-known Member
I make no secret of it...I'm a CPA. In my own best interest, but in truth I honestly believe, I will paraphrase an old saying about lawyers. Unless he has a relatively simple life, a person who does his own taxes has a fool for a client. My clients tell me that they feel I am well worth my fees. It is not a racket and it is unnecessary and insulting for someone to say such a thing. There is no way that a person can take a short tax course and preparing only their own taxes can hope to compare to a person who has made a career of it and brings years of experience from hundreds of classes, prepared returns and diverse clientele to the table. Sorry, that is just common sense. An easy return on the other hand...probably does not matter who does it.
This matter of covenants not to compete is a pretty dicey topic. I believe they have to be reasonable as to distance and time frame. Your guy did not have to sign a covenant when he left. They cannot hold him captive. This would have been a condition of employment upon hiring or during his time there. It probably specifically includes you as a client of the firm and distance will have no relevance. I have never signed one but I understand it is common practice these days. Almost have to do it to stay in business.
This matter of covenants not to compete is a pretty dicey topic. I believe they have to be reasonable as to distance and time frame. Your guy did not have to sign a covenant when he left. They cannot hold him captive. This would have been a condition of employment upon hiring or during his time there. It probably specifically includes you as a client of the firm and distance will have no relevance. I have never signed one but I understand it is common practice these days. Almost have to do it to stay in business.
Dave H (MI)
Well-known Member
"Tax preppers have one of the biggest rackets going......"
Why do I suddenly feel like driving over to the university? Maybe spend an hour in the "cry room"? I hear they have puppies!
Why do I suddenly feel like driving over to the university? Maybe spend an hour in the "cry room"? I hear they have puppies!
Doing one's own taxes is a pretty broad statement. Lot of us had nothing but W2's and not come under the stupid earned income clause so they are pretty straight forward. Even now, since retired and self employed, I don't bother keeping track of my miniscule added expense like shop supplies because it would only save me a few dollars and just not worth all the record keeping. People always think of a deduction as cash in their pocket but you still have to pay for the article or product and then get to deduct it from their TAXABLE income, not your income tax.
john in la
Well-known Member
I do not think your personal CPA signed anything.
It sounds like the place that bought them out insisted on a no compete clause as a term of the sale.
So no one that worked at the former firm can do your taxes if they quit and go to another firm.
That is very common in the business word when you buy out and existing business.
Would be no way someone would buy out another business just to have them move next store under a different name and take all their clients with them.
It sounds like the place that bought them out insisted on a no compete clause as a term of the sale.
So no one that worked at the former firm can do your taxes if they quit and go to another firm.
That is very common in the business word when you buy out and existing business.
Would be no way someone would buy out another business just to have them move next store under a different name and take all their clients with them.
2002sliverado
Member
I used to be pretty sharp on taxes when I was involved in accounting and doing some auditing in a prior profession. I am no longer that sharp today. I know there are those who use the TurboTax products, but I have never looked into it. In our household we have earned wages from the two of us working, plus we have some farm income, and some rental property income. We also have some investments that have generated some income, as well as some losses. It seems our tax situation seems to get a bit more complex each year, and I just don't want to be doing this as an "amateur." I do ask questions of the CPA who does our taxes on those topics and issues I have some degree of knowledge about or have come across. I have also done a planning session with our accountant on some years. I feel confident in the abilities and the degree of professional knowledge our accountant has and the amount we pay him each year is worth not having the headache I would have if I was trying to do it on my own.
Any thing that lowers your taxable income also lowers your income tax, if you are in business and you have a windfall year, such as we had in the cattle business in 2014 and 2015 then you can either spend on infrastructure and equipment or pay excessive tax. There is an effective 35% discount built into all of my tax deductible improvements and upgrades.
When I worked for a CPA they had that with people that quit. Only their clause said any client that followed an employee out the door the employee had to pay 100% of the previous year's billing to company. They could take the customer but they basically did the return for free the first time.
ditchwitch
Well-known Member
I think the only one that would sign a no compete is the owner/owners of the business thats being bought. If your personal CPA was just an employee of said business being bought the employee would not have to sign a non compete.
That being said i dont think you mentioned that your personal CPA was the owner of the business that was bought..
That being said i dont think you mentioned that your personal CPA was the owner of the business that was bought..
That happens in the insurance business here in Illinois. If the agent works for a company that's bought by another, the agents sign over their book of business. If they go to work for the new owner they have to start all over and can't use their old book. Happened to my agent.
Traditional Farmer
Well-known Member
- Location
- Virginia
I agree with you 100%,my wife and I have a CPA do our taxes every year and she worked as a bookkeeper/accountant for years,BUT she says the tax laws change all the time and she doesn't keep up with them so we need someone to do our taxes that does keep up with the tax law.And I say its money well spent.
Donald Lehman
Well-known Member
When my wife bought her printing business the seller had to sign a contract stating he would not do any printing for 10 years.
I think what he was referring to is that once it's all said and done, depending on income levels, it's not a 1 for 1 deduction, rather a percentage. IF you are in the 15% tax bracket and those deductions knocked that down from 20% you save 5% of each dollar spent. So a guy running a small business that buys 500 worth of office supplies a year may not save any money with the extra accounting and such.
Rick
DENNIS MIN
Member
Gary h,
Perhaps a fixed percentage of gross income would suffice? enter pot stirrer here....
D.
Perhaps a fixed percentage of gross income would suffice? enter pot stirrer here....
D.
Tom OConnor
Member
Hi Dave,
I certainly agree with you. It's like so many things where a person has to make a decision. This to me is a no brainer. I have never been audited and every dime I receive and every dime I spend is accounted for but I would never want to be audited without a professional qualified CPA representing me and preferably the same person that filed the return. You are in the other persons game and playing in their ball park and the rules get changed all the time. In these cases the other person is the Federal and State agents and they seldom lose. I call it cheap insurance, peace of mind and well worth the cost.
I certainly agree with you. It's like so many things where a person has to make a decision. This to me is a no brainer. I have never been audited and every dime I receive and every dime I spend is accounted for but I would never want to be audited without a professional qualified CPA representing me and preferably the same person that filed the return. You are in the other persons game and playing in their ball park and the rules get changed all the time. In these cases the other person is the Federal and State agents and they seldom lose. I call it cheap insurance, peace of mind and well worth the cost.
Dave H (MI)
Well-known Member
Its terminal too! Nearly died of it twice in the last two years! Knock on wood, I have managed to make it 10 months in a row without so much as a scratch. Still thinking the idea of a nice room with puppies is appealing...as long as those dummy coeds can keep the sobs down to a dull roar.
Texasmark1
Well-known Member
Non-compete/non-disclosure agreements are common practice in sensitive areas. My tax preparer retired. She knew what it took to farm. When I lost her, I started doing them myself. Fingers crossed.
steve_in_mo
Well-known Member
There is more in the background than he is telling you, and that may be due to the way the former firm came apart.
Ethics gets really strange in a CPA practice.
He can do your taxes if (if he is willing, and) you ask him personally but he can't solicit (ask for) your business.
It may be that he no longer specializes in tax issues - specialization becomes more important in a bigger firm.
Ethics gets really strange in a CPA practice.
He can do your taxes if (if he is willing, and) you ask him personally but he can't solicit (ask for) your business.
It may be that he no longer specializes in tax issues - specialization becomes more important in a bigger firm.
Goose
Well-known Member
Also, there are CPA's and there are CPA's. We used a particular CPA for years, then our taxes got simple and I did them myself for a year or two. This guy then tried to bill me for doing our taxes the first year I did them myself.
Then our taxes got complicated again, so we went to a different CPA. She did our taxes, plus told me I'd done ours properly when I'd done them. She then reviewed and filed amended returns on the last several years of this other guy's work and got us several thousand dollars in refunds.
We've stuck with her.
Then our taxes got complicated again, so we went to a different CPA. She did our taxes, plus told me I'd done ours properly when I'd done them. She then reviewed and filed amended returns on the last several years of this other guy's work and got us several thousand dollars in refunds.
We've stuck with her.
The man said that he runs a small business, charging off expenses related to that business will
reduce his AGI, which in turn will reduce his total tax paid by whatever percentage his tax bracket
is times the dollars spent. Hence, 500 dollars spent, 20% bracket means that the supplies actually
only cost him 400 dollars. That's how I plan my improvements, I can either pay money in tax or
spend 65% more and reap the benefits.
reduce his AGI, which in turn will reduce his total tax paid by whatever percentage his tax bracket
is times the dollars spent. Hence, 500 dollars spent, 20% bracket means that the supplies actually
only cost him 400 dollars. That's how I plan my improvements, I can either pay money in tax or
spend 65% more and reap the benefits.
MarkB_MI
Well-known Member
- Location
- Motown USA
A non-compete clause is pretty difficult to enforce. After all, how would his original employer even find out he did your taxes?
It's quite possible the accountant received some sort of severance package that is dependent on him abiding by the NCC. At any rate, he doesn't have to do your taxes if he doesn't want to. But that doesn't mean he can't refer you to another accountant in his same firm.
It's quite possible the accountant received some sort of severance package that is dependent on him abiding by the NCC. At any rate, he doesn't have to do your taxes if he doesn't want to. But that doesn't mean he can't refer you to another accountant in his same firm.
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