# Random bill from accountant ... where do I stand?



## Kippah (Jan 28, 2016)

I read a newsletter from someone called the "bean counter" or something like that on a topic that was of interest as he had a view adverse to what I was thinking of doing (which was to call a tax lawyer to handle a Voluntary Disclosure to the CRA for my girlfriend who hadn't filed taxes in over 10 years). So I got in touch with him via his blog and he wrote back to say he didn't do that work, but had a friend/colleague or someone who did do that work. 

Well this guy phoned me and I explained the situation with the intent of working with him to file a voluntary disclosure, but I quickly lost confidence that this was a scenario he was expert in during the first couple of minutes. He had to go away to ask some people (as he said) and get back to me. I wasn't asking a deep complicated question, something quite fundamental in this process I'd have thought. I explained up front that the intent was to file a voluntary disclosure and that the conundrum was there were no T slips. I know already that the CRA keeps copies and I know how to get them. I just didn't want to trigger an audit by asking the CRA for them and were they needed anyway? 

He also mentioned the CRA may have issued correspondence many years ago and even that would negate the ability to file a voluntary disclosure (which I found out wasn't true ... they would have had to try to reach her in the last year or two). Also, he said we'd have to go back 10 years, which I subsequently found out was not true - you could request mitigated review periods. Also he could have filed a voluntary disclosure with the client being anonymous to see how they'd view her case which is when you'd ask for a mitigated period. At that point anyway (before finding out he was misinformed) my feeling was he wasn't experienced in the area but saw it as something he'd like to do and wanted to explore it.

When he got back to me, his advice was that she should go on line to CRA to get her T slips ... or his office could do this. He still wasn't clear if this would trigger an audit and negate the ability to even file a voluntary disclosure. But it would cost us $6000 (I think) for his services, and no guarantee the CRA would allow the voluntary disclosure, he still gets his fees. On top of this, 8000+in fees not including tax/penalties owing, to do the taxes. And that all this advice and research he'd done already was worth $500 plus tax and he was sending me a bill. 

Shortly after talking to this guy, I called a tax lawyer who asked me a few questions and in a couple of minutes gave me confidence that he knew exactly the situation and discussed the range of expected outcomes and was able to quote a fixed fee immediately. He asked no consult fee. I was confident enough to hire him. I didn't feel that way at all with the accountant, I felt he was misinformed even before I spoke to the tax lawyer. 

If the accountant was going to charge a consult fee, shouldn't he have disclosed this up front? Shouldn't he, as an expert, have been able to say to me up front after the first 1 minute -as the lawyer did- "your situation as you describe it will cost you Y$ in my fees and this would be in addition to $Z cost of doing the filings"? This is not a complicated situation that would require research. Simple t-4s, no investment income nothing.

What do I do about this accountant's $500 bill? What would you do? What is right?


----------



## Just a Guy (Mar 27, 2012)

I'd probably dispute it. 

That being said, I also wouldn't trust referrals from an anonymous message board without doing some research first.

So, if you do wind up paying, consider it the cost of education from the school of hard knocks.


----------



## Davis (Nov 11, 2014)

I don't think he can reasonably charge you without having told you upfront that there would be a consultation fee. I think that it should be a learning opportunity for the accountant - don't do a bunch of work before you've discussed fees.


----------



## Just a Guy (Mar 27, 2012)

It's usually not a matter of right and wrong, it's a matter of who'll fight longer. The accountant knows ways to put it on your credit rating, etc. You can take him to court and win...

Who'll go the distance if you choose to fight is the question. 

It reminds me of an article I once read about a big food chain that came into a city. They sent the owner of a local restaurant a cease and desist letter for using the name. The small time owner had legally registered the name years before the big American chain had come to Canada but their response was basically "we know you're right, but we have deeper pockets and can take you to court until you're out of business".

It wasn't until he went to the media that they backed off and paid him a small sum to help cover the cost of changing his signs and menus. He was still forced to give up the name.

Hopefully, by complaining, you'll win (make sure you talk to his boss) and it doesn't come to this.


----------



## CPA Candidate (Dec 15, 2013)

If it wasn't clear that you were contracting with him for services then I'd probably dispute it. If it took $500 worth of time to come up with an answer for this; he doesn't have the ability to do the job.

If you took your car to a mechanic to change the transmission and he spent 3 days researching how to do it, would you pay him for that time? He's clearly in over his head.


----------



## Davis (Nov 11, 2014)

The difference is that the mechanic would quote you $80 to do an inspection. That seems reasonable because s/he is spending her/his time. Not quoting a fee upfront and then expecting the person to pay is just dumb.


----------



## Charlie (May 20, 2011)

Sounds like he quoted you for a service and you declined to hire him. Unless you otherwise engaged him (or implied that you did) or he told you he would be charging for his services, I don't think you have to pay.

Once I called a similar company about voluntary disclosure -- they requested $250 to discuss my case to see if there was something they could do. So I declined. 

These guys do sell time, so I accept that they should be compensated even if you don't like their advice -- but , based on what you've posted it doesn't seem there was an agreement to hire them on here.


----------



## Mechanic (Oct 29, 2013)

I would call him and discuss the bill with him. He should have disclosed up front and/or you should have asked. There seems to be an obvious misunderstanding by one or both parties. You must have given all your information as he sent you a bill, at the time you were giving information would be the time to question the costs too.


----------



## Kippah (Jan 28, 2016)

*My view too*

This is my view too. 



CPA Candidate said:


> If it wasn't clear that you were contracting with him for services then I'd probably dispute it. If it took $500 worth of time to come up with an answer for this; he doesn't have the ability to do the job.
> 
> If you took your car to a mechanic to change the transmission and he spent 3 days researching how to do it, would you pay him for that time? He's clearly in over his head.


----------



## Kippah (Jan 28, 2016)

So true. What bothers me is he is a CPA, CA so you think he'd have this sort of situation dialled in.


----------



## Kippah (Jan 28, 2016)

When I did ask him for pricing in our second call (after he came back having 'looked in to something') is when he told me his costs and the amount he was billing me for his time to now. I said I'd think about it and get back to him if I wanted to move forward with him. Then he sent me the bill. There was never any discussion up front of cost nor a consult fee. I would say our total time talking was 7 minutes for the first call and about the same for the 2nd call. Much of it was me asking the same question relating to the same concern over and over again "are you SURE if we request the T-slips we won't trigger an audit and negate the ability to file for a VDP"? He couldn't say one way or the other but did close his conversation by saying that it wouldn't impact his ability to bill me if it did. I didn't get the sense he'd be adding much value to me as much as I'd be padding his wallet. His costs were way out of whack relative to other personal tax specialists.



Mechanic said:


> I would call him and discuss the bill with him. He should have disclosed up front and/or you should have asked. There seems to be an obvious misunderstanding by one or both parties. You must have given all your information as he sent you a bill, at the time you were giving information would be the time to question the costs too.


----------



## birdman (Feb 12, 2013)

I think I would be tempted to give him a call and be up front with him. Perhaps say something to the effect "that I have some issues with the bill and for that matter was somewhat surprised to even receive one". And then "I realize that you spent some time on this but I would have expected that you ought to have to known most of the issues without having to research them". "I don't want to make a big issue on this but I am having trouble with it and thought I would talk to you about it". And then "perhaps there is some middle ground"? 
Just my thoughts. Things like this I normally prefer to get rid of asap- out of site and out of mind.


----------



## Kippah (Jan 28, 2016)

Charlie, I like this approach - I will use it to frame my phone call with him. Thank you. I did not agree to hire him or pay a consult fee. And even if his costs were a fraction of what he said I wouldn't have worked with him as I had no confidence in his ownership of advanced ability to manage my situation. (Why else hire a specialist?) 

Our total "talk time" was around 15 minutes net of time he went away to do research or whatever he went away to find out. Much of the 15 minutes or so was me asking the same questions relating to the same concerns over and over again "are you SURE if we request the T-slips we won't trigger an audit and negate the ability to file for a VDP"? What if the gov't sent a slip years ago to the wrong address, does that count to rule out the VDP? And relative to his understanding of the process what would he do to achieve a successful outcome for us? He couldn't quote any similar experience where he'd faced this before and what the outcome was so I could compare our situation to whatever he had faced. 

His approach was for me (or his book keeper) to phone the CRA and get the t slips and then he would do the Vol Disc and he wasn't going for a mitigated review period either. I could fill out such a lame VDP and expose my partner to audit by requesting the t slips up front all by myself for much less than 6000. Its a form for heavens sake. He probably wanted the t slips and not to do an anonymous VDP to get it over fast and ensure all the risk was transferred to us, with no risk from developing a VDP strategy he'd have to argue to defend with the CRA. If I trusted a professionals plan I would follow it and pay for it, but I didn't get that sense of comfort that you do when you trust someone. I always felt he was either unknowledgeable or untrustworthy - maybe trying to learn on my dime so he could have some experience to quote to the next guy.


----------



## Kippah (Jan 28, 2016)

Agreed, good advice I want to prepare for the conversation and this I will use . Thank you.



frase said:


> I think I would be tempted to give him a call and be up front with him. Perhaps say something to the effect "that I have some issues with the bill and for that matter was somewhat surprised to even receive one". And then "I realize that you spent some time on this but I would have expected that you ought to have to known most of the issues without having to research them". "I don't want to make a big issue on this but I am having trouble with it and thought I would talk to you about it". And then "perhaps there is some middle ground"?
> Just my thoughts. Things like this I normally prefer to get rid of asap- out of site and out of mind.


----------

