What the hell is happening?


D

Dick Adams

Arthur Andersen is gone.
Now KPMP pleads quilty to tax fraud.

My father was a doctor and he once said to me that his
signature at the bottom of a piece of paper was prima facie
evidence that what was above his signature was the truth.

When I became a CPA, I held out with pride that my signature
was as good as his. He hugged me, kissed me, and said "never
sell your integrity". It was one of the few times I ever
pleased him.

I am happy he is no longer here to learn that others do not
value their signatures as he did and I do.
 
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D

Drew Edmundson

Dick Adams said:
Arthur Andersen is gone.
Now KPMP pleads quilty to tax fraud.

My father was a doctor and he once said to me that his
signature at the bottom of a piece of paper was prima facie
evidence that what was above his signature was the truth.

When I became a CPA, I held out with pride that my signature
was as good as his. He hugged me, kissed me, and said "never
sell your integrity". It was one of the few times I ever
pleased him.

I am happy he is no longer here to learn that others do not
value their signatures as he did and I do.
It is sad to say but I see evidence of unethical behavior in
the profession quite frequently. Even on this board. I
will not name topics or names but I have seen posts that
were obviously wrong. I have then seen someone else reply
citing to a case, regulation or to the code and yet the
original poster will not admit his or her mistake. They
either ignore the reply, say something to the effect that
their point is "arguable," or they just continue to argue
but only cite to "common sense" or the dictionary definition
of the term.

Now there are plenty here that will admit they were wrong or
at least stop arguing when it is shown they are wrong but
there are those who just won't.

The unethical behavior I see so often (and not just from
other professionals but also from taxpayers) makes me wonder
who the state CPA boards think they are fooling by requiring
ethics classes. Either the person learned ethics as a child
or they didn't . It isn't something someone picks up in a 2
to 8 hour course like you learn how to install a tile floor
at Home Depot.
 
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C

Cheryl Kaster

I am a Notary Public, branching out into tax preparation and
I can tell you from experience that there is no such thing
as ethics any more. Or at least they are hard to find. I
belong to a notary board and I see all the time notaries
(before whom you are supposed to swear to the truth of your
affidavit) who are less than honest and willing to "look the
other way" for the sake of convenience.

As a Notary Public, I am not there just to witness someone
signing a document or attesting to the fact that they did
sign it. I am not supposed to take any part in a
transaction that I have reason to believe is fraudulent. As
such, I have had to report borrowers who blatantly, openly
and unashamedly falsified a loan application.

As a newbie to the tax preparation field, my ethics question
is: if a client discloses to me in the course of the
conversation that he is withholding or misstating income,
for example, must I complete the return?

Cheryl Kaster
Honest Notary
(what a pity that it is necessary to specify that I am honest)

--
Cheryl R.L. Kaster, Honest Notary
Mobile Notary Public
Certified Notary Signing Agent
Signing Hawaii, Inc.
Honolulu, Hawaii
www.signinghawaii.com
(808) 524-8040
(808) 356-0163 (Fax)

* * * Doing what is right, not just what is convenient.* * *
 
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L

Larry

Cheryl Kaster said:
I am a Notary Public, branching out into tax preparation and
I can tell you from experience that there is no such thing
as ethics any more. Or at least they are hard to find. I
belong to a notary board and I see all the time notaries
(before whom you are supposed to swear to the truth of your
affidavit) who are less than honest and willing to "look the
other way" for the sake of convenience.

As a Notary Public, I am not there just to witness someone
signing a document or attesting to the fact that they did
sign it. I am not supposed to take any part in a
transaction that I have reason to believe is fraudulent. As
such, I have had to report borrowers who blatantly, openly
and unashamedly falsified a loan application.

As a newbie to the tax preparation field, my ethics question
is: if a client discloses to me in the course of the
conversation that he is withholding or misstating income,
for example, must I complete the return?
You must NOT.

As an Enrolled Agent I am bound by guidelines that say that
I MUST withdraw and refuse to prepare the return unless the
client agrees to abide by the applicable laws which include
reporting all income. Personally, I take the position that
I "reserve the right to refuse services to anyone".

IMPORTANT - when ANY paid preparer signs a return they are
signing a declaration (under penalty of perjury) that the
declaration is based on "ALL INFORMATION OF WHICH PREPARER
HAD ANY KNOWLEDGE".
 
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P

Phoebe Roberts, EA

Cheryl said:
As a newbie to the tax preparation field, my ethics question
is: if a client discloses to me in the course of the
conversation that he is withholding or misstating income,
for example, must I complete the return?
Your signature as paid preparer on the return states that
all the facts are true, complete, and accurate to the best
of your knowledge. So any knowledge of errors you have
precludes you from signing the return.

Plus, my advice to you would be that you are far, far better
off firing weaselly clients and keeping the honest ones, if
your intention is to be honest.

Phoebe :)
 
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H

Harlan Lunsford

Cheryl said:
I am a Notary Public, branching out into tax preparation and
I can tell you from experience that there is no such thing
as ethics any more. Or at least they are hard to find. I
belong to a notary board and I see all the time notaries
(before whom you are supposed to swear to the truth of your
affidavit) who are less than honest and willing to "look the
other way" for the sake of convenience.

As a Notary Public, I am not there just to witness someone
signing a document or attesting to the fact that they did
sign it. I am not supposed to take any part in a
transaction that I have reason to believe is fraudulent. As
such, I have had to report borrowers who blatantly, openly
and unashamedly falsified a loan application.
Thanks for expanding on this. I always thought that the
only function of a notary was to "notarize" a signature,
and whatever was being signed was of no consequence to the
notary.
As a newbie to the tax preparation field, my ethics question
is: if a client discloses to me in the course of the
conversation that he is withholding or misstating income,
for example, must I complete the return?
Now for the crux of the matter. When a client makes such a
disclosure, you terminate everything right then and there,
hand him back all his documents and give him 30 seconds to
get out the door.

So, the answer is simply "you MUST not complete the return".

ChEAr$,
Harlan Lunsford, EA n LA
 
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B

Bob Sandler

As a newbie to the tax preparation field, my ethics question
is: if a client discloses to me in the course of the
conversation that he is withholding or misstating income,
for example, must I complete the return?
No. You can always turn away business, or decline to prepare
the return.

Bob Sandler
 
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B

Bob Sandler

As a newbie to the tax preparation field, my ethics question
is: if a client discloses to me in the course of the
conversation that he is withholding or misstating income,
for example, must I complete the return?
No. You can always turn away business, or decline to prepare
the return.

Bob Sandler
 
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V

Vic Dura

As a Notary Public, I am not there just to witness someone
signing a document or attesting to the fact that they did
sign it. I am not supposed to take any part in a
transaction that I have reason to believe is fraudulent. As
such, I have had to report borrowers who blatantly, openly
and unashamedly falsified a loan application.
Just curious. How do you know when a loan app is being
falsified? Do you examine the documents that come before
you to assess the accuracy of the data/info therein? I
didn't know that was a notary's job.
 
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S

Stuart A. Bronstein

Harlan Lunsford said:
So, the answer is simply "you MUST not complete the return".
Or as Johnnie Cochran would say -

If the client's a cheat, you must not complete.

Stu

Moderator:
That one is in the running for the 2005 tax humor award.
 
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S

Seth Breidbart

Drew Edmundson said:
It is sad to say but I see evidence of unethical behavior in
the profession quite frequently. Even on this board. I
will not name topics or names but I have seen posts that
were obviously wrong.
Just FYI, some of us aren't CPAs or professional accountants
of any stripe.

So please don't blame my errors on the professionals (unless
you think it's their fault for not educating me better).
I have then seen someone else reply
citing to a case, regulation or to the code and yet the
original poster will not admit his or her mistake. They
either ignore the reply,
When I have nothing further to say, it is sometimes possible
for me to refrain from saying it.

Seth
 
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H

Harlan Lunsford

Or as Johnnie Cochran would say -

If the client's a cheat, you must not complete.

Stu
Moderator:
That one is in the running for the 2005 tax humor award.
I second the notion, Dick. This is a real classic.

Kudos, Stu.

and ChEAr$,
Harlan
 
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D

Drew Edmundson

Just FYI, some of us aren't CPAs or professional accountants
of any stripe.
I realize that. While not a frequent poster, I have been
around for a while. One reason I don't post more often is
the professionals that ignore the cites I provide and just
keep arguing the wrong result. To paraphrase my mother: "If
the answer was a snake, it would have bit them by now."

I want to be clear, I am not claiming to always be right. I
often learn things from some of the regulars. There are
just those who are sure they know the answer and just won't
admit (or even recognize) error regardless of the weight of
the evidence.

I spoke to a CPA/Attorney the other day who said: "The
Supreme Court hasn't ruled on zero compensation in an S
corporation so it is still arguable." Well it is arguable
that a dog is a cat but I don't think I will be convincing
any veterinarians of it.
So please don't blame my errors on the professionals (unless
you think it's their fault for not educating me better).
When I have nothing further to say, it is sometimes possible
for me to refrain from saying it.
I should probably have taken this tack with my original post
(just hit the delete key) but I had just spoken to the
CPA/Attorney I refer to above.
 
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N

nadr

Thanks for expanding on this. I always thought that the
only function of a notary was to "notarize" a signature,
and whatever was being signed was of no consequence to the
notary.
You are right. It is not the job of a notary to pass
judgements on documents being authenticated. If a notary
does this, they may be engaging in advisory services that
they are not qualified to provide or may incurr legal
liability that their insurance policies does not cover.
Now for the crux of the matter. When a client makes such a
disclosure, you terminate everything right then and there,
hand him back all his documents and give him 30 seconds to
get out the door.
Not so fast! I would suggest that you counsel the client to
do the right thing and if he/she listen and they take your
advice, then you can help them. If they are adamant about
doing the wrong things, then you can leave them.
 
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H

Harlan Lunsford

Just FYI, some of us aren't CPAs or professional accountants
of any stripe.

So please don't blame my errors on the professionals (unless
you think it's their fault for not educating me better).
When I have nothing further to say, it is sometimes possible
for me to refrain from saying it.
Right. And I can add nothing to that.

ChEAr$,
Harlan
 
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C

Cheryl Kaster

You are right. It is not the job of a notary to pass
judgements on documents being authenticated. If a notary
does this, they may be engaging in advisory services that
they are not qualified to provide or may incurr legal
liability that their insurance policies does not cover.
Well, I would disagree with this in principle as it could
also incur liability that my E&O coverage would not cover if
I FAILED to be appropriately discriminatory. On the other
hand, I do not advise with regard to the legality of or
contents of documents or give legal advice, but I can and do
make a judgment with regard to whether or not there is
something illegal being attempted. Not that I run across
that type of situation every day (where it is possible to
determine this on the face of it), but it does occur as I
have explained in other posts and I would be remiss to be
aware of this type of activity and continue with the
notarization.

--
Cheryl R.L. Kaster, Honest Notary
Mobile Notary Public
Certified Notary Signing Agent
Signing Hawaii, Inc.
Honolulu, Hawaii
www.signinghawaii.com
(808) 524-8040
(808) 356-0163 (Fax)

* * * Doing what is right, not just what is convenient.* * *
 
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C

Cheryl Kaster

Let me give you another example that I am dealing with at
the moment.

Borrower is being asked to sign a document called an
"Affidavit of No Judgment" in which the borrower is being
asked to swear, under oath, that he is not one of the
persons that appears on an attached list of people who have
judgments against them (with the same name).

FYI, a Notary Public must not permit a signer to swear to
something that the Notary knows is not true. Therefore,
with regard to documents that require a Jurat (Subscribed
and Sworn to <they signed in front of me and I gave them an
oath as to the truth of the information> before me...) it is
absolutely required that the Notary be cognizant of what the
document say, especially as, in this case, there is NO
ATTACHED LIST for the borrower to look at.

If I were to simply ignore the contents of the document and
an issue came up later, I would be guilty of notarizing an
INCOMPLETE document and swearing someone to the truth of
something that they had NO POSSIBLE WAY of knowing was the
truth. Doing so does not make any logical sense. What
would be the point of that affidavit?

If there were a list attached, then and the borrower were to
tell me that he is one of those listed on the attachment,
then I also could not swear him to the truth of a statement
that says he is not on the list, because I would know...same
as when TPs reveal income they are not wanting to report,
that what is being stated in the affidavit, as written, is
NOT THE TRUTH.

If he were on the list and he agreed to modify the wording
of the affidavit to correctly reflect his status in
relationship to the attached list, etc., then I could
proceed with the notarization.

While notarization does not make a document "legal," a
Notary Public must not take part (notarizing a document is
making that Notary a party to the transaction) in a
transaction which the Notary knows or REASONABLY SUSPECTS to
be dishonest or fraudulent in any way.

The document must stand on its own, apart from the
notarization, to be "legal" and the "legality" of the form
of the document is not my concern. However, to a certain
extent, the content and what is contained in or attached to,
or being sworn to IS MY CONCERN as a Notary Public.

EXAMPLE: YOU are asking someone to sign a PROMISSORY NOTE to
you, but you cannot be there, and you don't really know the
person , so you have the Note notarized. What if during the
signing the person admits to the Notary Public that they
really have no intention of paying this money back, they are
just signing it because they want to make you happy and get
you off their back about the money they owe you. Would you
really want the Notary to go ahead and notarize this Note
and say nothing to you about it?

In many ways, being a Tax Preparer and a Notary have
similarities with regard to not being part of something
(either a document signing or a tax filing) which contains
information or actions that are not legal or not true.
Someone could just as easily say, it's none of the Tax
Preparer's business whether or not I am reporting all of my
income. All they have to do is work with the numbers I give
them. Sure, I only make $10,000 a year and I support five
people. It's none of their business how I do that.

--
Cheryl R.L. Kaster, Honest Notary
Mobile Notary Public
Certified Notary Signing Agent
Signing Hawaii, Inc.
Honolulu, Hawaii
www.signinghawaii.com
(808) 524-8040
(808) 356-0163 (Fax)

* * * Doing what is right, not just what is convenient.* * *
 
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H

Harlan Lunsford

Thanks for expanding on this. I always thought that the
You are right. It is not the job of a notary to pass
judgements on documents being authenticated. If a notary
does this, they may be engaging in advisory services that
they are not qualified to provide or may incurr legal
liability that their insurance policies does not cover.
Not so fast! I would suggest that you counsel the client to
do the right thing and if he/she listen and they take your
advice, then you can help them. If they are adamant about
doing the wrong things, then you can leave them.
Actually I agree with your intention there, in that if we
can "educate" a client and then he decides to "do the right
thing," perhaps we've gained a client for life.

However in Mrs Kaster's question, somehow, some way, I read
all of her message as referring to the same miscreant, i.e.
the one she suspected of falsifying an application was the
same potential tax client. Maybe they were two different
individuals.

So to be clear, if you suspect someone of trying to pull the
wool over your eyes, either as a notary public (not a
notorious republican which I am), or as a tax preparer, and
you can't be satisfied by either questioning or resolving
the problem in your own mind, iow, if you still suspect he's
lying, by all means, show him the door.

There used to be a Chevrolet commercial down South which
counseled: "Don't you BUYYYYYY no UGly TRUCk!"

And I say, "Don't you take no ugly clients."

ChEAr$,
Harlan Lunsford, EA n LA
 
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S

Stuart A. Bronstein

Cheryl Kaster said:
Let me give you another example that I am dealing with at
the moment.

Borrower is being asked to sign a document called an
"Affidavit of No Judgment" in which the borrower is being
asked to swear, under oath, that he is not one of the
persons that appears on an attached list of people who have
judgments against them (with the same name).

FYI, a Notary Public must not permit a signer to swear to
something that the Notary knows is not true. Therefore,
with regard to documents that require a Jurat (Subscribed
and Sworn to <they signed in front of me and I gave them an
oath as to the truth of the information> before me...) it is
absolutely required that the Notary be cognizant of what the
document say, especially as, in this case, there is NO
ATTACHED LIST for the borrower to look at.
In particular with respect to a jurat you are right. You
are not just notarizing his signature, but also his oath.
If you know is oath is not truthful, you shouldn't notarize.

With respect to an acknowledgement, which is the most common
thing to notarize in my practice, you're just swearing to
the identity of the person signing.

Stu
 
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A

Arthur Kamlet

So to be clear, if you suspect someone of trying to pull the
wool over your eyes, either as a notary public (not a
notorious republican which I am)
Which leads me to ask if someone can be a notary private?

If not, isn't "public" superflouous? Or redundant? whatever.

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
 
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