New Client hAs assessed taxes In the amount of $3,950,078

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    Raymond Garnsey

    Received my 2848 two weeks ago along with my engagement letter for transcript investigation and my retainer. During our initial meeting, client said he hasn’t filed returns for 2008 through 2015 and 2018. Told him they have to be filed or the IRS won’t talk or negotiate until they are. He said he would do 2018 and we could work on the rest.

    2007 was an SFR with an assessed balance of $3,930,572 which includes a FTF penalty of $405,986 and a FTP penalty of $451,096.

    Client mentioned at our that he had a CDP hearing today for a Notice to Levy but did tell me what it was for. He called me this morning and asked if he should tell the Hearing Offier to call me. Told him he engaged me for the transcript investigation phase and I don’t have the details to know what the hearing is in relation to so he would have to do it. Told him if they were going to levy his bank account to tell her yu need those funds to necessary living expenses.

    When I met with him he pulled out a wad of cash to pay my retainer. Told him I prefer a check. Said he would get a money order. He also mentioned that he and his wife were leaving the state and something about a structured mortgage abanonment (couldn’t remember exactly the term he used but know structured and mortgage were in it.)

    How would you handle this client?

    Eric Green

    Ray, there are lots of reasons to NOT take this client. The critical thing here is to just do the analysis and decide if you feel like dealing with this person. My biggest concern is can you even do the collection work when it seems they may or may not be forthright with you. You need to have a talk with the client and see if your comfort level with them improves. I have had clients that are a mess but were not necessarily bad clients.

    If you do keep them:
    1. Get the returns for 13-15, plus 18, pulled together and filed to get them into compliance (ignore the ones before 13)
    2. Work on a 433 with back-up. They may be keeping a lot of their income off the books, which would be a reason to NOT take them as clients. If you get the sense that the 433 would not be accurate I would walk away from this.


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