Client onboarding and review

Forum|Forum|2 years ago
July 3, 2024
2 replies
9 views

Was referred to a client by a person I trust. He needs business tax returns (2017-2019) filed for a laboratory that never made sales. I know that a different CPA reviewed a draft tax return that the client prepared but preferred to hand it off as he doesn't do businesses. He admitted that he has filed a lawsuit against his equipment supplier. His CPA and accounting manager for the lab both died a few years ago and he doesn't have good financial records. So those facts give me pause to determine what due diligence is needed. Other than a discussion with the potential client, a review of the accuracy and completeness of the accounting records, what sort of investigation can I do?

Lacerte Tax

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IRonMaN

Level 15

What sort of investigation do you do for other clients? Personally, I would meet with him and see if he passes the smell test. If he smells like someone that is a decent person but a little scatter brained when it comes to bookkeeping and taxes, I would help him out. If he instead gives off a toxic smell -------- run.

Slava Ukraini!

abctax55

Level 15

I agree with what Jeff said; I'd add that you should get a 'large' retainer up front. And bill against that until depleted then get more as necessary.

HumanKind... Be Both

S

strongsilenceAuthor

Level 10

Thanks mr. abc.

This seems like it could be an ongoing engagement - with tax notices, client questions, etc. so a large retainer is on my list.

PATAX

Level 12

I would not get involved with it. I think you have enough work. As the old saying goes: If the waters are calm, why have a fat lady jump in?

S

strongsilenceAuthor

Level 10

@PATAX

I met him and he is a straight arrow. He is a scientist by training, ran a food quality laboratory for years, then the cannabis industry began, and he wanted to use his training to improve the quality and medicinal attributes of cannabis. The wrong crowd started to get involved in his business, a vendor supplied him with inferior equipment, and he initiated a lawsuit, and his partners turned against.

I'm not the best judge of character but I believe him.

PATAX

Level 12

@strongsilence 👍 good points there. If he is a Straight Arrow and your gut tells you it is okay, then I would accept him as a client. Sometimes people that are real straight are a little naive and others take advantage of them, I'm not saying this is what happened, I'm just saying in general. Heidi is real naive, and that Pitbull gang tried pulling one on her, but she wasn't having any of it.🐕☝

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