Updated: May 2
What Do You Do When: Your CPA Goes MIA
Tax season. No one really loves it, do they? Rummaging through shoeboxes and grocery bags of crumpled receipts that you swore you were going to organize (but never did) while trying to decipher which number goes in which line on which form. It's a bit like numerical Tetris!
That's why many folks turn to the professional guidance of tax preparers. According to a recent survey, around 44% of tax-filing Americans will use tax software to complete their filings, while another 18% will hire a Certified Public Accountant (CPA) to handle that task. CPAs are licensed to provide accounting services to the general public after having undergone extensive training, testing, and continuing education requirements.
Depending on a variety of factors, including the complexity of the filing, CPAs can cost anywhere from a few hundred to several thousand dollars, which is certainly an expense to seriously consider. However, the peace of mind that their education, experience, and certifications can bring will be well worth the investment for many people.
Well, it's usually worth it, but what happens if the person you rely on for those services just… doesn't respond? Like, at all? What do you do when your CPA goes MIA?
Well, if you're anything like me, you string together a slew of profanities in multiple languages. Then, perhaps, you hex them to suffer a particularly tenacious case of athlete's foot. However, once the cursings-of-all-varieties are complete, you still have to solve the problem. After all, you're the CEO - Chief Executive Owner of all your company's wins and challenges. So, it's time to roll up those sleeves, break out the calculator, and get mathing!
Now, I want to preface that we are not here to name-and-shame, so please do not ask for this CPA's identity. Also, I want to clarify that when I say they "went MIA", I do not mean that they simply didn't return a phone call or email within 24 hours. I am realistic of how overwhelming this season can be for CPAs and will certainly extend some grace when it comes to communication, especially as the calendar ticks down to Tax Day.
In my case, this was months of radio silence and multiple efforts on my part to reach them by every means except carrier pigeon, all without success. This was not exactly a surprise. There had been communication problems with this person before, but never quite this bad.
With less than 48 hours until taxes needed to be postmarked - and knowing full well it would take me quite a while to complete them myself - I did not have the luxury of waiting to see *if* they would come through.
Thankfully, I've worked with accountants for over 20 years and have family members who were in the industry, so that familiarity with the process helped. The other bonus is that I am extremely organized! Well, sometimes it's organized chaos, but I do eventually get the ducks in a row.
As a client, I do my best to make my accountant's life easier and their work more efficient by preparing a well-organized spreadsheet of my income and expenses, which I submit well in advance of the filing deadline. In fact, my previous accountants have been so thrilled at these organization skills that several have requested I teach a class on that!
Hmmm… not a bad idea. Would you be interested in that???
Anyway, getting back to our conundrum. You may wonder, "You're a small business - why do you even need a CPA? Can't you just do your taxes yourself?" Fair question, and for some people, this is a perfectly viable option. I tried that approach the first year I began freelancing and it was just too much. Too much time, too much stress, too much uncertainty, and too much pressure to get something right that I knew very little about. It was not the best use of my resources, especially time and energy. This is also the time of year when I am usually swamped with work, so trying to navigate IRS instruction manuals while working 60+ hours a week was a recipe for disaster.
There are times when you, your business, and your resources are best served by hiring a professional and for me, tax preparation was where it made sense to make that investment. There are simply too many complexities in the tax code and too many calculations that can go wrong. However, I did pay attention to the work that my accountants did and made sure to review the draft returns with them so that I understood what was going on to the best of my abilities, and THAT made navigating The Case of the Disappearing CPA much, much easier.
In the end, I was able to complete the returns myself by using my fabulously well-organized spreadsheets and last year’s return as a template. Then I sent my now-former CPA an email informing them that their services were no longer required. Then… I crawled into a ball with a hot cup of tea and Netflix because my brain and soul were toast. For what it’s worth, they have still never replied to a single email, including that last one.
The next tasks are less exciting. First off is finding a new accountant who understands and respects small business so they can review the returns I prepared, as well as the work the former accountant did (just covering those bases). Then I will be filing a complaint with the AICPA, which is the organization that certifies accountants. It’s a step I had hoped to avoid, but given the seriousness of this situation, along with the fact that their communication has been consistently poor over several years, it’s something that needs to be done. It will then be up to the AICPA whether or not to investigate my complaint and take any action.
Lastly, I am going to build out that class on organizing your expenses because had I not kept such good records, I would have been up the proverbial creek without a paddle. I am not the first small business to find themselves in such a situation, nor will I be the last, so at least folks can learn from this experience and be prepared to take charge when needed. I hope to see you there!