Do you find errors in your tax done by accountants?

[wylie]

I'm so annoyed.

I've just received my tax back from the accountant and in the checking of it, notice that only a portion of our land tax has been apportioned over the properties. Total claimed is 67% of the total paid.

Our annual package fee has also not been claimed anywhere.

Do others find that they have to check this stuff so closely?

My mother once found something missed in her return that (had she not picked it up at the checking stage) would have resulted in her paying an extra $12K in capital gains tax for that particular house.

I'm just so sick of paying good money to "supposed" professionals and finding errors every single year.

The error (this year) might only mean $1K that we would have paid in tax that should not be paid, but that $1K is important to me.

I'd be keen to change accountants, but for a while now that is impractical for several reasons. Going forward though, I think I'd like to change to another, but I'm curious to know if I'd be jumping from the frying pan into the fire?

Is it unusual for them to be making these simple mistakes, and missing things like this?

 

[yahoo]

I am always finding errors.
Last year the interest paid was input as interest received!
I basically work out all my figures and then look at the differences. If it was a simple return I would do it myself.

 

[EN710]

Yes, found mistakes before, like double counting my interest received so I pay more tax. Like yahoo, I do my own calculation and see how big is the gap.

The error (this year) might only mean $1K that we would have paid in tax that should not be paid, but that $1K is important to me.

"Only" $1K? That's close to what I paid the accountant for 2 ppl simple tax return with 1 property. I will storm and demand them to fix it with my face looks like hell have broken loose.

 

[Evachange]

Yep, had lots of errors with a number of accountants.

I wish it did not happen but it does.

Cheers,

 

[Paul@PFI]

I come across this stuff regularly. I seem to attract a lot (!!) of second opinions through SS. There are a lot of people in tax who shouldnt be. Often the person you see in some firms is unqualified or inexperienced. Somebody who has paid to do a course over a few days. Who reviews it ? Often nobody. You meet Mr X who is experienced - He give it to Jenny who is 19 and no experience. He thinks she did a good job. He does check it. I dont work that way. I do 100% of my own work. NOTHING gets touched by juniors or others. If it takes too long and costs me that my problem.

Unfortunately its often as a result of price. Cost and quality are inverse. Sorry if you pay peanuts its a good chance of rubbish output. Thats a fact.
My second "alarm" is a tax agent who you cant talk to you in plain english. If you cant understand them walk out. You want the smartest and best to do your tax. If its simple the fee should be simple and if it gets complex they should be able to do it all.

Allow me to give a recent example. No names used. Its 100% real and frightening example of what I believe is just negligence as you describe. He didnt realise how bad it was until I reveiewed his paperwork. And how it can be fixed.

Person on SS is a non-resident. Has many Aust properties. Has owned for years and growing his IP's. A high income earner too. His tax preparer is a major well known chain through a franchise suburban office in another state. Cost $440 a year. Thats too cheap for the content.

Each year he generated a loss. Its accumulated over around 15+ years and is large. In 2013 he sells a IP and makes a large gain.
1. They say its not eleigible for discount cause he is non-resident
2. They say he cant offset c/fwd losses to reduce tax
Wrong on both counts.

I review PY tax and losses are real and perfectly OK. Furthermore I review last 2 years.
3. No Cap allowance deductions claimed
4. No depreciation claimed.
Taxpayer has 5 QS reports - The numpties didnt even use them for the last two years. (And client didnt pick up on it either)

But worst of all they apportioned interest deductions over ALL properties when loan interst only for one property. A major risk of audit etc. Thats just blind stupidity in my book creating a massive audit risk. ATO will ask why IP#2 had no loan & now has $20K of loan interest etc. They would just deny deductions. If its outside 2 years poor taxpayer is gone. Total incompetence in my book.

I amend PY tax 2 years and claim around $60K in extra deductions
I review and re-apportion expenses correctly
I recommend a valuation dated 8 May12 to access CGT discount to ALL his properties. That cost his a few hundred but saves huge $ on taxes. CGT gain halve. Was $180K now $90k.
I prepare a 2013 tax return that offset C/F losses against cap gain.

Saving ?? $65,000 tax !!! And taxpayer still has $80K of carried fwd losses left. The other guys had him paying $60K and he had no losses.

Extra cost was large due to lots of rework. A few thousand dollars. Saving v's cost. Priceless.

My advice is change accountants now. Dont pay them. Tell them why. Consider a formal complaint. The tax practitioners board expects agents to provide quality services. Penalties apply. In addition you may make complaint to their professional body.

Happy to discuss - pm me.

 

[Paul@PFI]

I am always finding errors.
Last year the interest paid was input as interest received!
I basically work out all my figures and then look at the differences. If it was a simple return I would do it myself.

Tax agent software allow me to do that. That first thing I do when I think I have finished. "Helicopter view"...At worst case its a good discussion point to guide why tax refund / bill is more or less.

Being a good tax accountant is about communication. Not the paperwork.

 

[Paul@PFI]

I used to work as a tax adviser to accountants / tax agents and lawyers. It would frighten you how many of them know jack.

One of best I encountered was a super excess contribution issue. Was going to cost his client a motza at a rate of 78%+. He was arguing with ATO making it worse. They denied a deduction for superannaution contributions as tax act limits deduction to taxable income. Solution in two seconds....Amend return to increase taxable income !! Ignore the deduction - It will take care of itself. He refused to do it. Wouldnt listen that tax act doesnt prohibit overstatement of income. There are no substantiation rules on income. He asked me to do it.

I amended return, client signed and lodged. ATO called me and were unhappy. They know what I did. I reminded them they have no legal basis to deny income from a tax return. They are only allowed to deny deductions in a scheme / Part IVA !! Had a call later from an Asst Commr Super I know who was laughing and thought it was clever. He admitted it was OK and nothing they can do. He seemed surprised few had even tried this approach.

 

[Rob G.]

I find, or the ATO finds, lodging mistakes with my paper returns like SMSF.

I must give myself a severe warning !

In contrast, etax with its pre-filling and cross checking is a breeze.

 

[Anh]

I used to use the firm in COORPAROO , charging $900 for 2 txt returns, however I did everything for them and put it in a ready format for them to input toe tax, The problem was the firm used junior staff who stuffed up my depreciation as I checked against my own calculations, complained, then they fixed it, still wrong. I ended up doing my own tax return since.

If anyone knows any good tax accountant pls let me know.

Thank you
Anne

 

[jaypee06]

If every accountant worked like you, where would Jenny get relevant work experience? It's in the best interests for the profession and the community for firms to operate like that so that the next generation of accountants can get an opportunity to develop. Otherwise there will be a skills shortage and we'll have no choice but to get more foreign students in.

Don't put all the blame on Jenny either. In most firms that work has gone through a review process and should have been picked up. Have a word with your client manager and or the accountant/s who do your work and make your own judgement if you think the work they perform meets your expectations. Keep in mind that delegating work to a junior isn't a bad thing and with a good review process in place it shouldn't affect the quality of the work performed

 

[Doovalacky]

First IP, didn't know better no depreciation or discussion about pro/cons of getting a schedule done on a new house. That cost me for several years.

Even last year, picked up wrong values for items and some missed tool claims. At the same time mistakes I have made have been picked up and extras claimed for as well.

Like others I use Etax to provide a summary/check to accountant and various years have submitted via it due to time etc.

 

[perthguy]

Unfortunately its often as a result of price. Cost and quality are inverse. Sorry if you pay peanuts its a good chance of rubbish output. Thats a fact.

If you pay peanuts, there is a good chance of rubbish output but paying top dollar is no guarantee of success either. I once paid top dollar for a very reputable accountant to feed me a line of bull. He was doing my brother-in-law's, sisters and parent's tax at the time. They have all moved to other firms.

 

[wylie]

I agree... we are not paying peanuts. That is even more annoying.

 

[perthguy]

Do others find that they have to check this stuff so closely?

Yes. It is common. The biggest issue I have with bad accountants is when they won't make legitimate claims. I have fired more than one for that.

My parents just moved to an accountant with limited clients who goes through their tax like it is her own. It's not a very profitable business model for the accountant but it's what she wants at this stage in her life. They are looking to either pay off or sell one of their IPs and she offered to advise on the tax implications of each option. Pretty good service IMO. She's certainly a lot more thorough than their last overpriced accountant.

 

[Dazz]

I obviously have a very different expectation when I hire humans to assist me in my decision making.

I authorise them to assist me, but ultimately the responsibility rests me with. When you are the Principal, it can never be palmed off to someone else.

In this example that you raise of accountants and tax returns, it clearly states on all tax returns submitted by all taxpayers to the ATO that it is their returns, and they take responsibility for what is in it, and authorise their tax agent to submit it if they choose to use one.

Clearly, a taxpayer cannot in all good conscience sign their ATO declaration without first checking everything in there is correct and they are happy with what they are claiming, not what their accountant is claiming on their behalf.

Do others find that they have to check this stuff so closely?

Of course, why wouldn't you ?? It's your tax return. Just because you choose to employ someone to assist you, does not mean it relieves you of the burden of ultimate responsibility.

With this particular example you have raised of accountants and tax returns, it's in your best interests to double check everything. No-one knows your investment portfolio better than you do, and no-one should have a greater interest in bettering your financial affairs than you do.

I'm just so sick of paying good money to "supposed" professionals and finding errors every single year.

If you change your outlook to them assisting you do your return, instead of doing it for you, you won't get so sick.

BTW, there are only 4 recognised areas of profession.

• Medicine
• Law
• Engineering
• Arms

Accountants do not rate amongst any of the four professions. Adding up doesn't qualify.

Accountancy is not a profession.

I'm curious to know if I'd be jumping from the frying pan into the fire?

If you change your outlook to them assisting you do your return, instead of doing your return for you, the frying pan / fire analogy won't matter. Ultimately you'll take responsibility no matter who prepares it for your checking and ultimately your authorising signature.

Is it unusual for them to be making these simple mistakes, and missing things like this?

No, it's very common, for the reasons outlined above. They are not professionals. No-one has your best interests in heart more than yourself.

Keep checking, keep forensically analysing your own returns like you are obviously doing now, and it won't really matter who does the leg work for you.

Your robust system of supervising your return and double checking everything will survive any incompetency shown up by your employed contractors.

Every Australian taxpayer should view it from this platform to eliminate buck passing and Teflon shoulder syndrome. Unfortunately, the majority of folks take no ownership in their signature, and are more than happy to point the figure at the contractor they employ and say "I dunno, he / she was supposed to do it all for me".

Enter the blame game and lawyers at 10 paces. All downhill for everyone involved from that point, except the lawyers.

 

[wylie]

Dazz, my expectation is the same as yours. I actually don't hire my account to "assist with my decision making". I hire him to get the information I give him into a form that the ATO can process. I don't ask my accountant to take responsibility for my return. I give him all the information and pay them well to put numbers in boxes and somehow, every year when I check it, the most basic mistakes are made.

It is annoying that something so simple as adding up the percentages claimed for the total of our land tax bill didn't come to 100%. How can they not be embarrassed by something so simple?

If I wasn't paying good coin for this service, I would be less annoyed.

Your comment (as you've commented before) about only four professions has nothing to do with this argument . I'm paying for a service and should not have to find so many little mistakes.

Even the email apology for the land tax error and the news that an amended return is on its way has completely ignored the second mistake I picked up and asked about in the same email. So they have looked at one question, fixed it, apologised and totally ignored the second mistake I've pointed out. So, my return email probably will now mean an amended, amended return is going to be on its way.

It is a bit of a joke really. And no doubt the time spent fixing "their" mistake will be billed to me. That annoys me too.

It must be close to a full moon when this stuff gets me so annoyed. It is just one thing after another lately.

 

[jerrybee]

You get what you pay for. I think mine is like $250-300 an hour. Cost me 1k to do taxes this year. Worth EVERY penny. He's so bloody good. Every one of my colleagues uses him and not a single one complains about his rate.

 

[wylie]

You get what you pay for. I think mine is like $250-300 an hour. Cost me 1k to do taxes this year. Worth EVERY penny. He's so bloody good. Every one of my colleagues uses him and not a single one complains about his rate.

I pay the same. But I'm getting mistake after mistake. It seems we are paying organ grinder rates, but the monkey is doing our returns.

We can finally move from this firm after years of being tied there by circumstances that would take me too long to explain.

My concern is whether this is "normal" or if others find silly mistakes.

It seems it could well be "normal".

I could accept it if I was paying a cookie cutter, cheapie place.

Edit... and don't start me on the legal debacle we found ourselves in and the fact we should probably sue our lawyer when (if) it ever finishes...

 

[jerrybee]

Yeah I see what you're saying. I went to HR Block in the early days and the person I was asking continually referred to a tax book for every question I asked him. I don't expect you to know every question, but if you're having to look up EVERY question then what am I paying you for?

 

[FFChaser]

You get what you pay for. I think mine is like $250-300 an hour. Cost me 1k to do taxes this year. Worth EVERY penny. He's so bloody good. Every one of my colleagues uses him and not a single one complains about his rate.

alright to share the contact of this bloody good accountant?