Discussion:Not paid in 14 Months

I have learned the hard way on the need for collecting retainers. I completed three years of tax returns for a couple and have only been paid part of the fees due (14 months ago). My question is this: The client is requesting their original 2005 tax information back-receipts, W2s, etc. Do I have to give them this information or may I hold it until I am paid the money that is due to me? Are there legal or ethical issues revolving this?

Do a search here...my name may come up...hehe but there are quite a few unique ways to get paid if you have not been already. Sorry for your predicament btw....

I did have the customer sign an engagement letter stating if I wasn't paid that there would be interest applied to the amount owed. Has anyone had luck with a collection agency? If so, if they provide services in California please send me the contact information.

Thanks everyone for your feedback and Sandy I will be looking up your creative ways on being paid. I look at this predicament as a learning process.

For future, I suggest you make copies of their source documents and return the originals to them immediately. My reasoning is that often times when it comes to them being in arrears in filings, they tend to "lose" their source documents. At that point, then I am not obligated to return my copies to them if I have not been paid. It actually did work for me for one client who did not pay and wanted my photocopies since I returned his source documents immediately and he had since lost them all....

Per sandy's advice, definitely copy pertinent information before giving it back to them.

Shred a W-2 or 1099 every 24 hours until he pays off the balance due. Don't forget to demand a helicopter to take you to a non-extradition country.

Invite them to pick them up and tell them to bring their checkbook with them.

Invite them to pick them up and tell them to bring their checkbook with them.

I have a form letter that might be appropriate under these circumstances. I never had to use it however a CPA friend of mine got satisfaction when he used it a few years ago. Date Taxpayers Name Address RE: Fee for preparation of your 2000 U. S. Individual Federal Tax Return - $ Taxpayer SSN Spouse SSN Dear Pursuant to Section 10.34 of United States Treasury Department Circular Number 230, Title 31, Code of Federal Regulations, I prepared the above referenced Federal tax return in anticipation of payment for my services, and accordingly, signed the return as the PAID PREPARER. As of this date, I have neither received payment from you nor have I received communication, written or oral, indicating your intent to pay the preparation fee. I, therefore, will on (some date in reasonable future) notify the Internal Revenue Service of the inaccuracy in the reporting of PAID PREPARER information on the above referenced tax return. Your Attention to this very important matter is hereby requested and your prompt remittance of the ($ amt) is anticipated to be forthcoming. Sincerely, CC: U. S. Department of the Treasury, Internal Revenue Service, Examination Division DATE TO SEND Good luck Mike Dubin CPA

Retainer required for anything that's going to cost more than $1000. Engagement letters and/or fee estimates for anything that's going to cost over $500.

I return all original documents to client with their file copy. I keep copies for my records for source documents etc.

If a client would ask for these, would I still be obligated to provide the copies of source documents??

This gives them incentive to make the payment on time. When cash flow was tight we'd also include a 2% discount if it was paid in the first 10 days.

very likely you will get a response.

i think you have to return the source documents but it's possible that until you get paid you may have "temporarily misplaced" their originals and you can advise them that as soon as you find them you will be certain to give them a call :)

Will