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Hello,
I have been working with a local tax preparer (not a CPA) for audit representation of his clients. So far I have done about 3-4 tax representations over the last four years. He has been in the business for 36 years and has a solo practice with good loyal clientele. He is 77 years old and his health and tiredness have made him eager to retire and look for a successor.
While working with him in gathering the work papers, documents and getting questions answered with the last audit, he has mentioned several times how it would be great for me to eventually take over his business. It’s a great accounting and tax practice with good cash flow and profitability. However, after working with the IRS representations for some of his clients, I realize that the audits were a result of improper tax advice, lack of research and proper due diligence and mistakes in the tax returns.
I am concerned about the potential liability and malpractice issues since it seems that he is taking unacceptable accounting and tax risks and it will come to bite me after the takeover.
My biggest dilemma is after knowing the above, what would be the best way to take over and make a transition? Would it be conflict of interest if I took over the clients that I did IRS representation for? Would a purchase agreement nullify the potential risks and future malpractice situations? What about future IRS audits and notices? And how do I structure the takeover and transition? Is it worth buying the practice? Any thoughts and comments would be appreciated.
I have been working with a local tax preparer (not a CPA) for audit representation of his clients. So far I have done about 3-4 tax representations over the last four years. He has been in the business for 36 years and has a solo practice with good loyal clientele. He is 77 years old and his health and tiredness have made him eager to retire and look for a successor.
While working with him in gathering the work papers, documents and getting questions answered with the last audit, he has mentioned several times how it would be great for me to eventually take over his business. It’s a great accounting and tax practice with good cash flow and profitability. However, after working with the IRS representations for some of his clients, I realize that the audits were a result of improper tax advice, lack of research and proper due diligence and mistakes in the tax returns.
I am concerned about the potential liability and malpractice issues since it seems that he is taking unacceptable accounting and tax risks and it will come to bite me after the takeover.
My biggest dilemma is after knowing the above, what would be the best way to take over and make a transition? Would it be conflict of interest if I took over the clients that I did IRS representation for? Would a purchase agreement nullify the potential risks and future malpractice situations? What about future IRS audits and notices? And how do I structure the takeover and transition? Is it worth buying the practice? Any thoughts and comments would be appreciated.