Conflict of Interest

[Bart]

I have a divorced couple who each want me to still do their taxes. Should I have them sign a conflict of interest letter now that they are divorced?

[NECPA in NEBRASKA]

If you decide to prepare both returns, you should.

Bonnie

[jainen]

>>now that they are divorced<<

You can probably proceed if there does not appear to be any genuine conflict. But even with a release of information you are on rocky ethical ground when you need to decide who claims the kids or what qualifies as alimony. Generally you should pick one and refer the other elsewhere.

[kcjenkins]

Yes, just as a CYA, get them both to sign one. Then, be careful that you stay as neutral as possible when dealing with them. If they then behave like rational adults you'll have no problem, but if they continue to have 'issues' with each other, you pick one and fire the other.

[MAMalody]

Your big issue will come up when one individual tells you something that contradicts what the other parent told you about, say, who claims the kids, etc. Privacy issues still exist.

[Lion EA]

One ex will hear something from anyone (teacher, former sister-in-law, whoever) about how much summer camp really cost or any other item and think you're the one who told. Be very, very careful.

[Booger]

Lion's example is a good one. A married couple client of mine went through a nasty divorce this year, and I've already

made up my mind about dropping one and keeping the other as a client. Had to prepare the 2008 returns under different

scenarios (Joint vs Separate, husband claiming 1,2, or 3 kids versus wife claiming none, etc.) then submit all of the various

filing schemes to both attorneys. I was accused of violating confidentiality by one of the spouses, which I didn't.

The 2008 returns were filed on October 15th. Glad to have that one completed.

Booger

[jainen]

>>then submit all of the various filing schemes to both attorneys. I was accused of violating confidentiality<<

A fair accusation, in my opinion. Did you have a written release of information to show the opposing attorney what was being reported on the separate return? That's how it goes down. Remember, it is common (to put it mildly) that lack of honest communication (to put it mildly) was a factor in the breakup (to put it mildly) of the marriage. And of course, they don't always put it mildly.

[Booger]

Jainen, I got a written release from both before I submitted the husband's returns to the wife, and vice-versa.

The couple couldn't even agree on what address to use on the returns. hers or his. I recommended that one of the attorneys

office address be used, since joint returns were filed and a joint refund check was coming.

Booger

[kcjenkins]

It is terrible when people who have kids can not talk to each other politely, but it happens way too often. And when they are contemplating filing jointly, of course you have to be privy to all the data from both sides. But I'd pick one to go forward with, and politely drop the other. It's just not worth the stress.

[jainen]

>>I got a written release from both<<

Smart. But not always good enough because even if you have "permission" to release information you still have a duty to only act in the client's best interest. And if that doesn't happen to also be in your OTHER client's best interest, which is likely, then your problem is that much larger BECAUSE of the release.

[kcjenkins]

But when they are still married, and discussing with attorneys how to file, they need one person doing all the returns. And at that point, the preparer does multiple versions, turns them over to the attorneys, and the decision is made not by the preparer, but by the tps and the lawyers.