Is an engagement agreement with a CPA enforceable?

Hi-- I've been using the same CPA for about 15 years. We have an engagement agreement that we signed 15 years ago that outlines her, and my, responsibilities with respect to tax payments, etc. She recently moved and decided to cut off contact with me and at least 6 others clients of hers that I know. I thought that she was just too busy with the move until a number of filing deadlines came due and she never returned my phone calls. It's actually quite weird as we had a great relationship and the other 6 clients said the same thing.

I have since hired another CPA but missed a few payments as a result of her just 'disappearing'. My new CPA got everything back current and I owed some penalties.

I would assume my old CPA has some liability here, but I've been told by another CPA that engagement agreements with a CPA aren't enforceable. Is that true?

Thanks!

Reply to
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"." wrote

It would depend entirely on state law. But I have doubts that a 15 year old engagement letter has any effect today, either way. Had you signed one every year, well, different story.

Reply to
Paul Thomas

you are ultimately responsible for all tax payments including penalites. A CPA could be sued for failure to complete some parts of a prior agreement but chances are that doesn't include your situation. Did the CPA actually make tax payments for you or did they just make the calculations?

Reply to
Steve

She would meet me at my office and prepare the reports and cut the checks. Everything was ready to mail by the time she would leave.

After 15 years, I had expected her to continue our relationship unless I heard otherwise. She would always call me at the last minute to get my taxes done so that made the matter worse when she decided to take off.

Insofar as the agreement being 15 years old, both of us still honored the agreement and conducted our business in accordance with it. I believe common law interpretations would hold us both accountable to it. After all, she certainly expected payment from me after she did the work- I certainly couldn't stiff her on the payment and say, "Gee, our agreement is 15 years old so it doesn't mean a thing."

I've just neve seen a situation were a so-called professional just took off without communicating with her clients. I would have thought that the CPA organization would have some sort of ethics code that would make the action of abandoning a client without notice a violation of professional standards.

Pat

Reply to
.

I've never encountered a situation like that either but you could contact the appropriate state CPA Board or state CPA organization. (states license CPA's) As far as I know ethics guidelines like those from national organizations such as AICPA - (American Institute of Certified Public Accountants) deal with audits and audit reports and not client situations. Unfortunately, I think your recourse with this person is limited.

Reply to
Steve

"." wrote

As far as a jury would understand it, you had a contract when you walked in the door with your stuff. She clearly couldn't whip out that 15 year-old engagemente letter and force you to come into her office for your tax work. What makes you think that you can force her to do your taxes then?

Actually, no notice is required. Certainly giving notice would be a polite thing to do, but there is no law or code that requires it.

And, there seems to be time for you to get whatever it is you need done by someone else.

Reply to
Paul Thomas, CPA

My guess is that she had a serious personal crisis in her life. It could be a mental health crisis; it could be a personal medical problem as someone else suggested; she could be in some type of alcohol or drug rehab program; etc., etc. You worked with her for 15 years so you know she is not the kind of professional who would behave this way by choice. Something not good has happened in her life. I don't even know her and I hope she is okay. My suggestion would be to wish her well, move on with another CPA (which you have already done), and skip all of the contract enforceability and liability law issues.

Reply to
JayBC

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