$1000 to CPA upfront

[oilboy123]

My brother gave $1000 upfront to a CPA to help him fix the tax mess he is in. He had a couple of consultations. Then he missed an appointment. She was in the process of moving and put him in a holding pattern, and would not call him back later. She now says that the $1000 is hers and says she gets to keep it because the time she has invested.

At $50 hr that would be 20 hours...... He has a receipt, but that's about it. I'm thinking he should probably be entitled to at least $600-700 of the 1000 he paid her.

Any recourse?

I told him he was an idiot for throwing a wad of cash at her...

 

[NMBurb02]

Tax consultation with a knowledgeable and experienced CPA costs a lot more than $50 per hour. More like $100-150, especially in the heat of tax season. Depending on what was said or signed, that $1,000 could be considered a retainer or sorts and he could be SOL.

Edit:This site quotes someone as saying their CPAs run $90 to $300 per hour.

 

[cashmoney]

High quality CPA to handle complex tax case issues would normally be $100-400/hr. You can't get a decent plumber or electrician for $50/hr.

 

[oilboy123]

Well my brother can be flaky. So I can't dis on her too much. Just seems like he should be entitled to some of the money back.

 

[CT8]

I wouldn't have missed the appointment.

 

[raytseng]

I don't see the jump in logic that he should get money back. Did he have an agreement that said $1000 was for "Completed" taxes?

However, by the same token, I don't see the jump in logic that if he fails to show up, then she gets to automatically keep all the money with nothing delivered. If she is saying work was done, your brother should be able to demand a itemized bill showing hours worked and at what rate, and be able to have access to the results of that work, partial or otherwise.

If not he can take her to small claims court to not only produce where that $1000 went, but also negligence on her part for the losses from failing to complete the taxes, when your brother can prove he was avaiable after 1 missed appointment.

 

[SZR48207]

Let him know this is why money should always exchange hands with a bill of some sort (showing a rate x a quantity so that the amounts settle correctly). I know there are old school ways of simply trusting that someone will do the right thing with a wad of cash and good faith but you also get into messes like this.

In my opinion, missing an appointment with a professional is no different than throwing away money. They are reserving time for a client that could be spent elsewhere making different money.

The $1000 seems like a small cost to learn a valuable lesson.

 

[demarpaint]

Originally Posted By: oilboy123
My brother gave $1000 upfront to a CPA to help him fix the tax mess he is in. He had a couple of consultations. Then he missed an appointment. She was in the process of moving and put him in a holding pattern, and would not call him back later. She now says that the $1000 is hers and says she gets to keep it because the time she has invested.

At $50 hr that would be 20 hours...... He has a receipt, but that's about it. I'm thinking he should probably be entitled to at least $600-700 of the 1000 he paid her.

Any recourse?

I told him he was an idiot for throwing a wad of cash at her...


I wish your brother good luck. I also don't know of any CPA charging $50/hr. It's usually a lot more than that. With regard to getting any money back, small claims court is probably his only option, again good luck.

 

[RedOakRanch]

I see a retainer as the minimum amount you're going to pay even if a minute of work is done. Can he just file an extension and have the CPA complete the work?

 

[JHZR2]

Originally Posted By: oilboy123
My brother gave $1000 upfront to a CPA to help him fix the tax mess he is in. He had a couple of consultations. Then he missed an appointment. She was in the process of moving and put him in a holding pattern, and would not call him back later. She now says that the $1000 is hers and says she gets to keep it because the time she has invested.

At $50 hr that would be 20 hours...... He has a receipt, but that's about it. I'm thinking he should probably be entitled to at least $600-700 of the 1000 he paid her.

Any recourse?

I told him he was an idiot for throwing a wad of cash at her...


I recommend that you learn about a fully burdened cost of labor. If the CPA is earning $50/hr, the overhead per hour that adds to that is at least 100%. So if the CPA is earning $50/hr take home, which is about $100k/yr and not unreasonable, the cost to the customer is more like $100-110/hr likely.

If he screwed up, and it's tax season, it's reasonable that he gets put on the back burner or dropped. He's not the only customer out there.

Chalk it up to getting in a tax mess to begin with, and then not following through.

 

[pottymouth]

I'd let him figure it out for himself.

 

[HerrStig]

He's entitled to the "work product".. the result of that grand's worth of work.

 

[HerrStig]

There is in most states some kind of regulatory body for the profession. He ought to seek their input. They may ask him to file a complaint.

 

[oilboy123]

I just did a quick search and saw some hourly rates for CPAs. I was using the 50hr rate as a guesstimate. Sounds like whatever rates I saw are not even close according to you guys......
I like the idea of the regulatory body. I'll check into that.

 

[oilboy123]

I think that a small claims filing is the only thing that makes sense. The relationship is fractured, and cannot be reconciled at this point.

Thanks for the comments.

 

[demarpaint]

Originally Posted By: oilboy123
I think that a small claims filing is the only thing that makes sense. The relationship is fractured, and cannot be reconciled at this point.

Thanks for the comments.


If he really feels he got ripped off then by all means give small claims court a shot. All he has to lose is time and a small filing fee if any. OTOH around here $1,000 might buy you 5 or so hours of a CPA's time, and odds are they'd cook the books and show they spent all that time and more if they had to go to court. It might be best to forget it and move on.

 

[JustinH]

CPA gets north of $100 per hour.

I paid $350 to have her file my taxes when I owned three rental properties, and my wife and I both had w2 jobs as well and investments.

Money well spent, my taxes were nearly 100 pages.

 

[Mr Nice]

Don't go to court, let CPA clear up mess.

Even $100 for 10 hours is a good deal.

 

[Alfred_B]

Originally Posted By: oilboy123
Well my brother can be flaky. So I can't dis on her too much. Just seems like he should be entitled to some of the money back.


It depends on the contract he signed when he paid the $1,000. Look at the terms, without knowing the details, we can only speculate.

 

[JayhawkRoy]

Start here:
http://www.cpaboard.wa.gov/consumer-protection

There are at least a category or two of complaints that could be applicable. Failure to provide services, and failure to return records come to mind. He should file a complaint indicating the issues he has (did not complete the work and retention of retainer without providing agreed upon work product or outcome).