when to get it in writing?

Hi everyone,

Does anyone have an opinion on this? My accountant finished my tax return a couple of weeks ago and asked me to look it over, see that I was happy with it, and then sign it and pay him. When I looked it over, I found a few mistakes and pointed them out to my accountant. When he re-entered the numbers, it turns out my wife's tax return underestimates her capital gains for the year (she redeemed some managed funds) by around $50. A small amount that the accountant says is not worth fixing as the fee he would charge me to do so would not make it worthwhile.

FOr my tax return, I also redeemed some funds from colonial first state. Colonial are doing a dodgy where they're refusing to give us a capital gains statement for my redeemed funds. They instead gave us a print-out of all of the details of when we bought units in the fund and sold them. THis was even after my accountant and I sat down to speak to them. Colonial reckons my accountant should be able to work the CG out from this, but my accountant insists that he can't. My accountant then said we would therefore completely ignore my CG liability for the action of redeeming the funds, and if the ATO ever finds out then we will just tell them that COlonial refused to help us out. I think my CG will be in the hundreds, but I'm not sure as I can't work it out. But I know that when I redeemed the funds I had made a few thousand on my initial investment.

SO then I asked my accountant to put that advice in writing as he was pretty much advising that he knew there were mistakes, but in his opinion we should do nothing and deal with it only if the ATO ever decided to find out. And in his opinion, even if they did find out, they still wouldn't chase us for it because we're talking about small amounts.

So I guess I'm asking:
1. Is it fair enough that I asked my accountant to put his advice in writing? He baulked at my suggestion, and eventually said for me to write a letter detailing what I understood he said and send it to him. He didn't even commit to signing the letter. But I thought I might add something in the letter saying that if I don't receive a reply I will assume this to be an acceptance of everything I put in the letter. Is that good enough?

2. Is everything my accountant suggested OK? He reckons 90% of tax returns have mistakes in them that the tax office never finds out about, and even if they do they don't do anything about it because the mistakes only deal with small amounts of money.

3. I'd like to pull out of this altogether and file my tax return with someone else as I don't like the entire way they've handled this. But am I entitled to do that as they've done all the work already?

Thanks for any replies

John

PS I am never going to use this accountant again!!!
 
What a dilemma!!!

Out of interest, where are you? (State)

Originally posted by john doe

1. Is it fair enough that I asked my accountant to put his advice in writing? He baulked at my suggestion, and eventually said for me to write a letter detailing what I understood he said and send it to him. He didn't even commit to signing the letter. But I thought I might add something in the letter saying that if I don't receive a reply I will assume this to be an acceptance of everything I put in the letter. Is that good enough?


No. As I understand it, and one of our resident solicitors (YOU KNOW WHO YOU ARE!!!) can verify this, but I remember (vaguely) from my commercial law lectures, that you can't contract to something by doing nothing.

What this means, is, that you can't say to someone, "If you don't ring my I will assume you agree to this contract." The other person must do SOMETHING to be bound by the contract.

If you want to have him sign it, I suggest you take it in to him. It's harder to ignore a person than a letter!


PS I am never going to use this accountant again!!!

Bloody good idea, that! :)

Good luck with it.

Let us know how it goes..

asy :D
 
As I understand it there needs to be communication of acceptance and a contract will only be valid if this acceptance is communicated to the Offeror by the Offeree or their authorised agent. The Offeror must know the offer has been accepted. This is only my understanding, I am not a lawyer.
 
Originally posted by john doe
So I guess I'm asking:
1. Is it fair enough that I asked my accountant to put his advice in writing? He baulked at my suggestion, and eventually said for me to write a letter detailing what I understood he said and send it to him. He didn't even commit to signing the letter. But I thought I might add something in the letter saying that if I don't receive a reply I will assume this to be an acceptance of everything I put in the letter. Is that good enough?

2. Is everything my accountant suggested OK? He reckons 90% of tax returns have mistakes in them that the tax office never finds out about, and even if they do they don't do anything about it because the mistakes only deal with small amounts of money.

3. I'd like to pull out of this altogether and file my tax return with someone else as I don't like the entire way they've handled this. But am I entitled to do that as they've done all the work already?

Thanks for any replies
John

PS I am never going to use this accountant again!!!

HI John

Yes, you should write that letter to your accountant and keep a copy for your own records. However, the tax office will screw you first and it would then be up to you to claim recompense from this accountant under Section 251M of the 1936 Tax Act which specifically says that you can.

If your accountant ignores this letter, you are within your rights to send another letter asking why the original letter was ignored and threatening to report him to the professional body to which he belongs.

His PI insurance company will crucify him . . . .

Alternatively, you may lodge your return with another accountant although you may end up paying two accountants for the same thing.

I'd like to say that accountants don't make mistakes . . . but, in doing so I'd be making one very big one. We all make mistakes whether it be through carelessness, tiredness, complacency, ignorance or just an honest oversight somehow. A good accountant should take pride in their efforts and try to get the return right to:

do the right thing and to protect you; and
to protect their own bum!

So, if mistakes are brought to their attention they should always be willing to correct them.

Yes, you are entitled to walk away and file your return through another accountant. I would recommend that you pay the account (even if you don't want to or appreciate the service) and just never go back with the signed version.

I hope that this helps in some small way and good luck.

Dale
 
John

I'd be pretty annoyed if my accountant gave me the "she'll be right mate" approach to tax returns.

Every year I curse ferociously the half hour it takes me to add up all the piddly amounts of interest on various bank accounts! My time is worth far more than the interest...MUCH more....BUT you gotta do it because the ATO doesn't take a near enough is good enough approach. If you earned assessable income it MUST be disclosed.

Sure, you might be lucky and not get audited and sure the amount of any penalty and interest would probably be relatively small in your case, but it's just not worth getting a "let's audit this sucker every year" flag on you file with the Tax Office!

I'd sack your accountant for next year for sure. As for this year, I'd take a stand and tell him that you'll pay his fees to fix it up (you'll get some back for your costs of managing tax affairs next year) and take it as an object lesson in finding a good accountant.

Asy, it's not so much an issue of contract as one of legal compliance and evidence. As Dale points out telling the ATO its all Colonial's fault or John saying its all his accountant's fault aint gonna help. ATO is a great one for saying - that's fine, just pay us and then sort it out amongst yourselves. You are right though that if John does go with his accountant's advice he must get everything he can in writing. Memories fade, recollections differ but it's actually quite hard to successfully fabricate contemporaneous written evidence.

Dale is always harping on about keeping good records in your own words - it's always the best advice.

Good luck with it
N.
 
Being generous to ATO

What do people think about this approach?

If I have a small interest to declare, rather than calling banks for missing statement etc, I declare a figure which definitely exceeds the interest. Say if I know the interest earned on my CBA streamline a/c is about $0.5 / month I declare $10/year. I will probably pay $1 more tax, but save a lot of time and phone calls.

Do they punish people for over-stating their taxable income?

Say cheese :p

Lotana
 
Re: Being generous to ATO


What do people think about this approach?

If I have a small interest to declare, rather than calling banks for missing statement etc, I declare a figure which definitely exceeds the interest. Say if I know the interest earned on my CBA streamline a/c is about $0.5 / month I declare $10/year. I will probably pay $1 more tax, but save a lot of time and phone calls.

Do they punish people for over-stating their taxable income?

Lotana

Hiya Lotana

The tax office cannot fine you for over decalring your income. Your approach will keep you out of trouble and will not penalise you very much at all.

Good for you!

Dale
 
Hi everyone,

Thanks for your replies. Would this be an OK strategy....pay this accountant and hand in my tax returns as is. THen next year, once I hopefully have found a good accountant, I ask them to do an amendment to make things right. Is that OK? THis would mean doing amendments for the 2001 tax return as that is the one that is creating all of the trouble.

Cheers

John
 
Originally posted by john doe
Hi everyone,

Thanks for your replies. Would this be an OK strategy....pay this accountant and hand in my tax returns as is. THen next year, once I hopefully have found a good accountant, I ask them to do an amendment to make things right. Is that OK? THis would mean doing amendments for the 2001 tax return as that is the one that is creating all of the trouble.
Cheers
John

Hi John!

It is a strategy. Whether it is a good one or not, is entirely up to you . . . obviously, if the tax office do not ask questions, there is no problem. However, should they ask in the meantime, I am doubtful that they will acceppt that you were planning to tell them the truth soon.

For obvious reasons of self protection, I have to advise you to lodge a correct tax return now and not run the risk of letting this farce go on any further. Sorry.

Good luck either way

Dale
 
Dale said:
I would recommend that you pay the account (even if you don't want to or appreciate the service) and just never go back with the signed version.
Might it be an option to pay a reduced amount to that accountant?

I had a problem with a settlement a while back. I felt the solicitor made a bad mistake in not checking one amount at settlement time, and did not pay. The solicitor offered to forgo the amount in dispute, on condition that I paid the outstanding amount quickly.

And don't forget that the extra expense of an accountant is deductable, even if you have to wait until next financial year to get the benefit.
 
Can't contract by doing nothing...

Hi,

As an old friend (and ex ATO staff) says "It is a terrible thing to fall into the hands of the taxman." Personally I'd harrass either Colonial or the accountant to do the right thing and clear it all up.

But....How about this for an idea.
What if John writes the originally planned letter, and sends it with his cheque for payment of the accountants fee with the inclusion of a qualification that if the cheque is banked then it shall be understood to be full acceptance of the whole letter?

Just a thought (and a not legally qualified one ;) )
Good luck,

Luke
 
Hi all,

Just thought I'd let you know what I've done so far. I called my accountant today and told him I insisted he make the changes to my wife's tax return, even though it was only a small error in our favour. And as for my colonial funds, I've decided to just cut my losses and overestimate the CG payable. So I'm going to take the CG as

(total redeemed funds - total original investment).

I think I'll ask them to apply the 50% discount to the this as I redeemed the funds more than one year after having made my final investment into the fund. I've got about 3 distributions that fall under one year, but even considering these my CG should still be overestimated shouldn't it???? (My investment was in the Colonial 1st state Australian share imputation fund)

CHeers

John
 
Good for you, John!

You will sleep much better knowing that you have done everything that you can to lodge a correct tax return.

One for the good guys!!!

Dale
 
The Offeror must know the offer has been accepted.

Hi,

Just a side note about the acceptance of an offer. If the acceptance is to be posted then the "postal rule" comes into play. This basically means that the contract is formed when the acceptance is posted NOT when the issuer of the offer receives the acceptance. So the offer can not be retracted during the time it takes for it to actually arrive. (This is just my recollections from uni not a legal opinion.....but i thought it might help someone at some stage)

Cheers
Chris
 
Yes, the postal rule allows that an offer is deemed accepted on posting even if it is never received as long as it was addressed correctly and postage paid except where the offeror specifies that acceptance will not take place until receipt of acceptance. An offer sent by post is not effective until it is received and read by the offeree. The postal rule only covers post and telegrams. (This is just my recollections as I am still not a lawyer)
 
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