Client wants to hit my E&O insurance

[Jack from Ohio]

I also make copies of all documents, that way I know if I missed something or the client forgot to bring it to me.

"...I know I brought it to you. You must not have copied it..." Heard that already.

[Richcpaman]

Scan everything that is important.  Not the Stockbroker booklets explaining the 1099, but the 1099 and all the others, and anything else they have written information on.

 

Where to put this info?  On a harddrive in your office with internal and cloud backup.

 

I set up a directory with my clients in alpha order, and then save the tax returns and the info backup to their file folder.

 

ATX kicks the returns out in PDF, and then I attach the backup to that PDF for only one file.

 

Rich

[Lion EA]

I do need to reconsider my E&O limits.  Yes, a few increased tax prep fees on the more complex returns &/or higher income returns would pay for increased coverage.  Studying that is a good November project since my E&O renews with the new tax season.

 

From my trust fund babies, I get, "Don't you get that from the internet?"  One year, a client called to see why his returns weren't ready yet.  He had given me NO information.  "But, I sent you my whole notebook."  Nope.  He eventually found tax info scattered throughout his house and called brokers and PTPs, etc., for duplicate documents.

 

And, I really have to scan everything.  I've been spotty about that.  Maybe I can have my retired hubby do some scanning during tax season.  Some of the stacks of client documents are inches thick, like that 2" notebook I receive each year from TFB plus the documents that trickle in afterward as he finds them or as brokers send corrected 1099s..  As has been said, there are lots of boilerplate pages and booklets that can be removed before scanning the information specific to that client.

 

I have been firing clients that are not pleasant to work with or have unpleasant boyfriends/girlfriends or sons/daughters or lawyers/trustees who want to tell me how to do my job.  Maybe I'm eliminating the ones who are likely to sue.

 

Thank you for the nudge to reassess my E&O coverage.  No one is perfect, and working against deadlines and with laws always changing....

[Mike D]

In my formative years of practice I recall a very similar situation where the client intimated that I omitted a form 1099. I had to admit my fault but was quite reticent about the omission. I resolved the matter by filing amended returns and paying all penalties and interest. This was prior to scanning and copying so I developed my personal internal controls. 

 

Every piece of physical information that I received from the client was marked with a red pencil checkmark by me.

 

Believe it or not I had a client subsequently attempt to blame me for omitting multiple documents. I simply asked them to find the original document and see if they had a red pencil checkmark on them!

 

End of story.

 

Today I scan all documents still using the red pencil checkmark. Old habits never die!

 

Mike Dubin CPA

[Lion EA]

I learned the blue checkmark trick from HRB; although, they had stopped giving us blue pencils by the time I was there.  I do put a check on each document and sometimes in each area from which I get info; I even put checks on client emails and notes as I enter info.  I need to get a colored pencil, though.

[MsTabbyKats]

Clients can get colored pencils and add check marks ......so I'm gonna start putting my initials on documents.

[easytax]

Clients can get colored pencils and add check marks ......so I'm gonna start putting my initials on documents.

Combine that with constantly putting "staples" in certain places --- as a secondary check to see if they did in-fact give you the document, etc. All sounds like a good idea for an ongoing office practice.

[Jack from Ohio]

My date stamp with the word Received.

[kcjenkins]

Back in the days before scanners, I used a 'Posted' red stamp to mark items as entered, when there were a lot, or I felt a need to CYA with a client,  And would make a copy of handwritten notes, so that they could not bring it back with some forgotten item 'added'.  

[Lion EA]

Well, my "checks" are either a script R or my initials RL or RLL in script.  Years ago I always used a green pen.  Think I'll return to colored markings again.

[mcb39]

In my formative years of practice I recall a very similar situation where the client intimated that I omitted a form 1099. I had to admit my fault but was quite reticent about the omission. I resolved the matter by filing amended returns and paying all penalties and interest. This was prior to scanning and copying so I developed my personal internal controls. 

 

Every piece of physical information that I received from the client was marked with a red pencil checkmark by me.

 

Believe it or not I had a client subsequently attempt to blame me for omitting multiple documents. I simply asked them to find the original document and see if they had a red pencil checkmark on them!

 

End of story.

 

Today I scan all documents still using the red pencil checkmark. Old habits never die!

 

Mike Dubin CPA

 

I also use the red pen method.  As you said, old habits die hard. 

[Kea]

Humm, sounds like method just takes too long.

When I'm reviewing the info with the client, I state which W2s, 1099s, etc. I receive and ask if there should be others.  I'll also mention companies that were on previous year's return that are missing from current year & ask if there should be one from missing company X.

 

Since I deal with most of my clients though e-mail, I get the "paper trail" saying that I had everything.

[SCL]

i am not totally clear on the facts.

"no exception, no tax (withholding?)"...what does that mean? code number?

 

are you saying you think you are liable for the 10% tax penalty on early withdrawal...just because you didn't report it on the tax return? no way.