# My accountant saga continues.....a long story still unfolding



## Prospector (23 October 2006)

Some of you might have read this on a property forum, in which case you will recognise I have a different user name there - no reason really, just that Prospector didnt sound right on a property forum!

This isnt about shares, but given my recent discussions with people like Julia et al about accountants, I thought I would share it here.

We have held an Investment property since 1996, which has always been rented out.  It is (was) in Noosa and was a serviced holiday apartment thingy, so it also has depreciating assets like bedding etc.

OK, in January 2004 we thought maybe it was time to sell so I contacted my original accountant because we needed to know our CGT liability so I could plan my taxes around it.  I gave him a purchase price/possible sale price, less costs scenario and he replied through email say yes, spot on calculation.

It took 18 months to sell, and while waiting for settlement I was able to send him another email with the real figures this time and again he said, spot on calculation.

I knew we were up for a swag of CG money so I took out way more PAYG tax then I thought we would need, because I hate handing over thousands of dollars in one hit.  So that was under control, (I actually calculated I would get 5k refund) and then I was also able to salary sacrifice thousands of dollars assumming I had my tax bill under control.

So then another accountant in the same practice, does our (partner and my) company, personal and super tax returns.  I got them back Thursday.  Our superfund - we have to pay tax because last year it did really well.  That's OK.  Ditto for the Company.

BUT - his CG calculations had me owing $11,000 additional tax to the ATO!  And I was expecting $5k back!

I rang him on the mobile from the Post Office in tears!  I dont have $11k just lying around to pay to the ATO, and wait a minute, what about the advice of the other accountant!!!!     

He said that I had not factored in a reduced cost base of purchase because of depreciation.  WHAT ARE YOU TALKING ABOUT - DEPRECIATION!!!  Why wasnt this raised before!

I told him about my previous email pre sale (I had forgotten the one I sent during settlement at the time) and I dont think he believed me, it was after all 2 years ago!  But I dont delete any emails..  

We pinged off emails backwards and forwards.  I contacted the ATO and they didnt think he was right.  I was in denial....my first accountant said 'I did say there would be some adjustments' - yeah right, $16,000 NETT adjustments! (The $11,000 owing and the $5K presumed refund).  Then I found the second email I sent which was very specific and in my favour!  

Then I posted on this Property forum!  Like Aussie Stock Forums, I received Bucket loads of assistance and support.  And guess what!

The accountant has calculated my building write off depreciation incorrectly.  Our property was purchased before 13th May 1997 which was when the new rules came into force!  So they do not apply!  This was on Saturday I found this out, so am waiting for his response today.

This error alone, reduces our tax bill by $8,000 NETT!  

The issues I am presenting in a meeting on Wednesday:
1. Incorrect advice both pre and during settlement sale may have influenced our decision to sell, and/or reduce the price
2. Had we been advised correctly we would not have salary sacrificed but put that money towards the tax bill
3. How did the second accountant also make such a signficant error in depreciation!

Last year when I queried the size of their accounting bill, I said to them that I reconciled all the accounts, finished them off in MYOB etc etc - I did all the work for them!  They said, yes, but "we ensure that it is all professionally presented and accurate!"  Do you reckon that statement is going to come back and bite them on the, well, wherever hurts the most!

I have not slept much in four nights, I am stressed, not eating, am running on adrenaline.  And I am so angry...


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## krisbarry (23 October 2006)

You could always try living in a tent, seems a lot less stressful.

Look I really think you don't know how lucky you have it.  Sure a few bumps in the road, but at least you have or did have and investment property, many have nothing and are living in tents and are on waiting lists for public housing.


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## daaussie (23 October 2006)

it sounds a little stressful. u seemed to have worked it out though. always remember that wherever you go though, people do make mistakes. And when the time comes, when you make a mistake you will hope that the person affected is forgiving. 

PS Interesting tale though, I will look more closely at what my accountant does.


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## happytrader (23 October 2006)

Hi Prospector

Sounds like your accountant has gotten fat, lazy and comfortable. Personally I would want to see an attitude change before I entrusted them with further business.

Cheers
Happytrader


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## Prospector (23 October 2006)

Stop_the_clock said:
			
		

> You could always try living in a tent, seems a lot less stressful.
> 
> Look I really think you don't know how lucky you have it.  Sure a few bumps in the road, but at least you have or did have and investment property, many have nothing and are living in tents and are on waiting lists for public housing.




Gosh, that's helpful!  I guess the fact that I paid maybe something like a total of $80,000 taxes this year doesnt help those in tents?


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## Prospector (23 October 2006)

daaussie said:
			
		

> it sounds a little stressful. u seemed to have worked it out though. always remember that wherever you go though, people do make mistakes. And when the time comes, when you make a mistake you will hope that the person affected is forgiving.
> 
> PS Interesting tale though, I will look more closely at what my accountant does.




I agree, we all make mistakes. Lots of them. And when I was on phone I kept saying - are you sure you havent made a mistake!  If he said, oops, sorry, I would have been so thankful it was all over.
But I have queried his calculations so many times in the last three days and the last email he sent said "I am very confident that my calculations are correct."
So...


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## Julia (23 October 2006)

Oh lord, Prospector, you just don't have to put up with this sort of rubbish and unprofessional service.

I'm much happier since I did the rounds of several accountants and now have one who is a thousand percent better and half the price, also doesn't rack up the bill if I make a couple of phone calls to her.

Go shopping.

Keep us posted.

Julia


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## Happy (23 October 2006)

Prospector said:
			
		

> I agree, we all make mistakes. Lots of them. And when I was on phone I kept saying - are you sure you havent made a mistake!  If he said, oops, sorry, I would have been so thankful it was all over.
> But I have queried his calculations so many times in the last three days and the last email he sent said "I am very confident that my calculations are correct."
> So...




Surely you deserve some kind of compensation, but legal professionals will take ages to stall, delay and in effect legal costs might far outweigh the possible funds recovery, due to incompetence of certified professional.

Would hate to be in your shoes, cos I don’t take pressure lightly any more, suppose sign of maturing.

Think of it, if you can, that this is just another obstacle, it would be quite a bummer if over money you could lose health or heavens forbid your life.


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## ghotib (23 October 2006)

<sarcasm>Isn't it great to know you're paying for professional service</sarcasm>

I second Julia's advice:  Go shopping. And to expand on that:  Go shopping for something absolutely spectactularly to wear to your Wednesday meeting, AND BILL THEM FOR IT!! 

Well maybe not: though it might throw them off balance. After that, when you bring out the notes of your conversation with the Tax Office they should be offering to redo their professional and accurate presentation and pay you for salvaging their reputation. 

I'm sorry you're having such a rotten time. We've been looking for a compatible accountant for 5 years and they seem to be very rare. It's weird to think that the Tax Office and Centrelink might be better financial advisers than accountants, but that actually seems to be the case for a startling number of a people.

Keep us posted. 

Ghoti


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## Prospector (23 October 2006)

ghotib said:
			
		

> <sarcasm>Isn't it great to know you're paying for professional service</sarcasm>
> 
> I second Julia's advice:  Go shopping. And to expand on that:  Go shopping for something absolutely spectactularly to wear to your Wednesday meeting, AND BILL THEM FOR IT!!
> 
> ...




Diamonds, I am thinking!  I am much better today, I feel like I am making progress with it all!  Ghoti, this is the basis of what he wrote when I mentioned the ATO advice line (I wont quote exactly):
please realise that the operators who take phone calls at the advice line are merely call center operators with very basic tax knowledge and they can quite easily get confused. 

Ha!  Another thing to come back to haunt him!


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## joslad (23 October 2006)

It often seems a hassle to have to change, whether it be accountants , brokers etc.  But that is the correct way to go when they don't perform.

The first accountant I got was a very clever individual - young and very ambitious.  I would have been one of his first clients.  He always prepared my returns etc on time and the advice he gave was top class.

He made it clear he was after much bigger clients than the small fry like me, however.  Unfortunately after a couple of years the service was slipping, as his client base was no doubt growing.  When I tried to tell him this, he didn't want to listen.  In the end I moved onto another acct.  I knew several others that used him too, and they have all moved on as well.  Shame really, cos he was on the ball, so to speak.

Find another accountant!  You should also seek compensation, no matter how difficult it may seem.  They need to be held accountable....

good luck


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## nioka (23 October 2006)

Prospector said:
			
		

> Gosh, that's helpful!  I guess the fact that I paid maybe something like a total of $80,000 taxes this year doesnt help those in tents?



There will be a lot of readers of this thread that wish they were paying that much tax. Even with a bad accountant you had to have had a good year to have that liability. There are two things hard to avoid,death and taxes. You need a good doctor and a good accountant. A bad one of either can be a disaster. Sometimes dodging tax costs more than paying it. eg losing money to get a tax benefit.


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## Prospector (23 October 2006)

That tax rate is the combined tax rate of myself, husband, Super Fund and Company (owned by myself and Husband!)  Personal Income tax amounted to about two thirds of that.  It was a throw away line to someone who has issues with others who happen to own a house, let alone an investment property!

I dont actually mind (well, you know what I mean : ) the amount of tax I have to pay.  That was never, ever my issue in this post.  I knew there would be a significant CG to pay (almost half the amount above, actually) but what I needed was information at the very start, so that I could plan effectively  to make sure I squirreled this amount away over a period of 18 months or so! And then I could confidentally go on with life as normal.

Which is why I sent my accountant two emails asking specifically how much CG I would need to pay.


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## TheRage (23 October 2006)

Prospector I can sympathise with you having had several bad encounters with accountants. When I owned my own retail business I asked the accountant who was setting up our books etc what it was going to cost me. She said that she had no idea due to the work in progress etc etc. She refused to give me an hourly rate etc. At this stage I should have walked away. Over the course of one year I made two phone calls and three emails and one face to face visit for 1/2 hr and that cost me $1K. I will preface this by saying that I ended up setting up quickbooks, doing all of the reconcilliations like yourself and in the end I got the business tax return done through another accountant for $140. So where was the value from my accountant. The chap that did my business return for $140 has since become my accountant and I am very pleased with his service. I totally understand you point with regard to sending emails for confirmation of CGT. You were trying to do the right thing and plan for its effect and they couldn't even give you the correct advice. I find doing a lot my own calculations now helps tremendously.


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## dutchie (23 October 2006)

G'day Prospector

It always hurts when you get bad advice from a 'professional", as you assume they are the experts.

However, they are human and do make mistakes. In this case quite a whopper!

I would sort out this problem with your current accountant and then leave for another one. When you get their bill ask for an interview to discuss it and by showing them their shortcomings agree not to sue them if they waive the bill. If they do not agree to waive the bill - sue them for damages and the bill.

When you go to you next accountant there is still no gaurantee that they willl be mistake free but at least you will have a better idea of what type of "professional" you are after. Tell them your previous problems with your last accountant and ask them what their policy is when and if they make a mistake that costs you money!

Cheers

Dutchie


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## pacer (23 October 2006)

*Have you ever heard of the Dept' of fair trading......I'd call them if the twit recons he should be paid for that sort of service!!!!!!!

Dont pay and tell him you will be contacting them.

Lawyers and accountants.......suck!!!!!........
*


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## ghotib (23 October 2006)

Prospector said:
			
		

> Diamonds, I am thinking!  I am much better today, I feel like I am making progress with it all!  Ghoti, this is the basis of what he wrote when I mentioned the ATO advice line (I wont quote exactly):
> please realise that the operators who take phone calls at the advice line are merely call center operators with very basic tax knowledge and they can quite easily get confused.
> 
> Ha!  Another thing to come back to haunt him!



Ackshully I think that's true, and I know it's true that you can ring twice with the same question and get two different answers. And I'm sure your point is that that's exactly what you got from your accountant firm, without the added insult of a bill. 

FWIW, I think Dutchie's approach makes good sense. Not saying it's what I'd do in your shoes (or diamonds), but it makes sense. 

Good luck.

Ghoti


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## Julia (23 October 2006)

pacer said:
			
		

> *Have you ever heard of the Dept' of fair trading......I'd call them if the twit recons he should be paid for that sort of service!!!!!!!
> 
> Dont pay and tell him you will be contacting them.
> 
> ...




I found contacting Fair Trading a complete waste of time.  Last year I received an account for the tax return and audit of my Super Fund for three times the quoted price. Had some fairly forthright exchanges in writing with the accountant, pointing out that even though such quote was verbal it still represented a contract.  Her counter argument was that there was more work involved than she had realised and the account would stand.
I responded that if that were the case, she had a responsibility to contact me and advise me of that increased cost before going ahead.

Fair Trading said "professional people are permitted to charge what they like - there is no price control on their services".  I pointed that that was not the issue, but rather what in my mind pretty much amounted to breach of contract.  They said, oh well, you might be right, but there's not really anything you can do about it!!!

It was clear from the discussions with this accountant that she would not release all my documents to another accountant if I didn't pay, so I very reluctantly did pay the whole bill.  I've ever since castigated myself for being so pathetically apathetic about it.  Sometimes you just have to weigh up whether all the emotional hassle involved in fighting is worth it to save $1500 or so.

However, Prospector, you had considerable problems with these accountants last year and probably should have moved on after that.  If you have the energy, I hope you get tough this time before finding someone who is competent and compatible - these people appear to be neither.

Julia


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## eddievanhalen (24 October 2006)

All sounds very familiar unfortunately .........I've always felt I was an idiot magnet with professionals/tradesmen etc..  but the more you hear the more you realise that a very large percentage of these people come nowhere near providing the very basics of the service that they're being paid for.  And in these busy times we often just take it on the chin as the cost of following these things up can be far more than the benefit to be had.

As a professional trader/investor I feel this almost on a daily basis.  I always have someone stuffing me around whether it be banks ,brokers, accountants, property managers, tradesmen and my time is just worth too much to be taking these people to VCAT etc...............and the sad thing is I think they know it.  I had a well known painting firm recently ruin my brand new merbau deck by applying the oil in what could only be described as a ridiculous fashion - totally contrary to all product instructions.  Fact is though my maximum win at VCAT would be $2-3k  and I've been known to drop $20k as a result of taking a toilet break   

Anyway........point is I suppose that in recent times I have come to realise that where there is an ongoing relationship involved , the short term pain involved in giving the offending party the **** and finding someone better is well and truly worth it. And it's very rare that giving these people a second chance works either - often the level of service picks up short term but in the end it'll get back to square one. In recent months I've changed brokers, property managers, banks , buyers advocates.........I could go on. In some cases I've had limited success but in others I have finally found the right person to build a long term business relationship with and that gets rid of at least a few of my daily bugs permanently.  Eventually I'll create a team of people I'm happy with but it won't happen while I allow incompetent people to walk all over me and charge me good money for it.

The property depreciation thing is an interesting one - very few property investors realise that (these days) the building depreciation gets taken off the cost base when it comes time to sell.  Heaps of people are going to have CGT headaches when the time comes.

If your accountant doesn't know the relevant dates when this rule came into effect then I'd be looking elsewhere.  Having been a professional in the medical/pharmacy industry myself I know what a problem it can be for practitioners trying to be an effective "Jack of All Trades".  If you're a serious investor you need to see an accountant who knows that stuff off the top of his head.  Just like a GP or pharmacist would need to refer you on for specialised treatment in many cases.

Well there's my whinge - you hit on a pet hate of mine.  Incompetent professionals .

Ed

PS  I gotta agree re the ATO - the people on the phones are totally underprepared at best and have no detailed knowledge of their supposed area of expertise in most cases.  Why it takes me 5 minutes of pressing numbers to get to a specific department is beyond me.


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## Bobby (24 October 2006)

eddievanhalen said:
			
		

> Well there's my whinge - you hit on a pet hate of mine.  Incompetent professionals .



 Hello Eddievanhalen,

Who-ever I take on to do what ever, if they pass my grilling to get the job & then stuff it up, well then they have Real problems.
Most know when they have done wrong, those that try to deny it soon realise not to F*** with me.

Bob.


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## pacer (24 October 2006)

An easy way to get a tradesman to do the job properly and at a reasonable price is to make them think you (or hubby or a mate) could do it yourself, or even have done it before, but cant just at the moment because of a medical condition, or you have too much work on in a 'similar trade'....lies will get you everywhere!
AND never pay full price for a slack job, or the time a trady spends yacking to his girlfriend on the phone.

The other way is to say you want it done properly or else!GRRRRRR!!!...lol

I had a vinyl layer do our kitchen and he put it in crooked....paid half of what he quoted and told him to get lost!....I wouldn't have paid him a cent if it was actualy my house....it was just part of an agreement I had for cheap rent, so it diddn't realy matter that much. The main thing I wanted to do was teach the bugga a lesson!

I also had a guy put in insulation in the roof, he got badly stung by wasps, was allergic, but soldiered on .....What a tough old Aussie......bought him a carton of beer for his efforts....he was pretty stoked!

Not all tradesmen are bad....I am one too......and we like compliments/beer.


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## deftfear (24 October 2006)

Both the CPA and ICAA/ CA organisations have a system in place where members of the public can make complaints regarding service that have been provided by a CPA or CA. As far as I know they take complaints made quite seriously and although it won't help your current situation it will help prevent it happening to someone else.

Prospector, if cash flow has become a problem due to this mistake, I would be asking your accountant to contact the ATO requesting a payment plan for your payments, rather than having to pay it upfront (with their time at their own expense of course) While this won't change the amount of tax you have to pay it will give you more time to pay it and decrease your stess levels a lot.

I do see how it would be quite easy for this mistake to happen however, if I got an email from a client saying I bought this property for 200,000 plus 10,000 expenses and sold it for 400,000 less 10,000 expenses is my total capital gain 180,000 and taxable capital gain 90,000 (just taking a rough guess as what was contained in the email) I would have replied promptly saying thats correct not even thinking about any capital allowances or depreciation as I would need to see your past tax returns to see the capital allowance being deducted. However I am probably nowhere near as qualified as your accountant and after hearing your story it will be something that I will always take note of when having anything to do with capital gains issues.


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## Prospector (24 October 2006)

Obviously I agree with all you say!  The trouble is, I am increasingly finding that I have to be more and more combatitive to get things done properly these days!  And I am not a naturally assertive person, so it stresses me greatly when I have to become someone I am not!  Other usually equate assertiveness in a female with aggressiveness!  but that isnt right!

And Eddie, you are so right about the depreciation thing!  All the positive stuff on property investing talks about the wonderful thing of depreciation, and how it reduces your tax each year!  But I have never ever heard anyone say but wait, when you sell, you have to reduce everything you have claimed (*even if you never claimed it *  ), from the cost base and thus hugely increase your Capital gains!  And there will be a lot of shocks for families, should the property investor die, because the people inheriting will have to wear that cost!  

Deftear, I would agree with you about the accountant having issues in determining the actual amount to be paid, but if just one of them, on five separate occasions when I raised the CG issue once the property was on the market, had said, "you must also remember depreciation has to be taken into account", even without given a figure, then alarm bells would have gone off and I would have said "what does that mean, exactly"   Also, the first accountant was my accountant when we purchased the property, he actually inspected it when he travelled to Qld for business, so the whole thing was not new to him!  He has been our accountant for 15 years!

The ATO guy I spoke to yesterday said that I was probably one of the few property investors left who could claim the date issue. 

After tomorrow I am sure there will be a mutual agreement that we part company, and they will hand over all the company books, Trust deeds, Superannuation Trust deeds, personal tax issues, memorandums etc etc.
I have a plan on what I am asking for, which is very reasonable in the circumstances.  I can now argue that both accountants (the one who gave me the initial advice about CG and the one who actually did the returns but didnt know the dates) have been incompetent, despite me querying him so many times in the last few days and was made to feel like 'who are you to question us professionals'! and secondly that I have suffered financial loss because I would not have salary sacrificed last FY but would have put that money to the tax debt and owe nothing now!  OK, my Super Fund benefitted but it isnt like I can write a cheque from my super fund to pay the debt!  And I dont think the ATO will wait until I turn 60 coz I am really very young  

They aren't responding to me now, I suspect they are in damage control.

The bigger question for them is that I will ask is for how many other property investors did they get it wrong!  That reaction might be worth getting on camera! 

Will let you know how it unfolds!


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## Prospector (24 October 2006)

And additionally (it wouldnt let me edit my last post!  ) most investment properties have large mortgages associated with them, so it isnt like you end up with much cash after the sale!


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## Duckman#72 (24 October 2006)

Prospector said:
			
		

> And Eddie, you are so right about the depreciation thing!  All the positive stuff on property investing talks about the wonderful thing of depreciation, and how it reduces your tax each year!  But I have never ever  heard anyone say but wait, when you sell, you have to reduce everything you have claimed (*even if you never claimed it *  ), from the cost base and thus hugely increase your Capital gains!  And there will be a lot of shocks for families, should the property investor die, because the people inheriting will have to wear that cost!
> 
> The ATO guy I spoke to yesterday said that I was probably one of the few property investors left who could claim the date issue.




Hi Prospector

Sorry to hear about your accountant problems. Hope you have a much better experience with your new one. An issue that is very obvious in this story is communication breakdown. Firstly - terminology. Special Building Write-off or Capital Allowance is not the same as depreciation - however it is often referred to as depreciation. Building write-off is calculated on the construction cost of the house at 2.5% (or 4% depending on when the house was built). It used to be a free kick for property owners - claim the building write-off and make no adjustment to the cost base of the house when it came to be sold. Very generous - so the Govt stopped it. They then said it must come off the cost base. However the taxpayer is still in front (depending on tax rates) - better to claim the tax deduction for the building write off. By the way,the Govt has introduced an amendment saying that *if you did not claim the building write off*, even if you were able to, you do not have to reduce the cost base of the property.

Secondly - for the accountnat to give you an estimate of capital gains tax they would have needed to review your whole financial affairs to get your overall tax rate. It is a common misconception that CG is taxed separately or at different tax rates when in fact it is just included in with the rest of your taxable income for the year.

Regards

Duckman


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## Prospector (25 October 2006)

Hi Duckman, I agree, the terminology is very confusing but I have got that bit sorted.

There are 2 professional issues:
1.  The original poor advice about the amount of tax
2.  Reducing the cost base when the legislation did not apply in this case.

Re the Tax estimate, when querying the tax amount I would be up for, I asked him to assume we were on the tax rate of 47%, (which overestimates it a little) based on PAYG salary + interest + dividends - less deductions (car, professional associations, sickness Insurance), add in the CG, deduct any CG losses and loss carry over, add in medicare = tax due!     Most of these things have been constant over a number of years, almost identical in fact except for a bit of inflation with some of the membership costs, and a slight reduction in the car costs due to the depreciation of vehicle.

The second issue is practice management - they should have a check list - was the property purchased before 13 May 1997? - Yes.  If Yes, were the costs incurred before 1999, If Yes, then dont reduce the cost base!

Time will tell, 3 hours til the meeting!


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## Nicks (25 October 2006)

Prospector said:
			
		

> Some of you might have read this on a property forum, in which case you will recognise I have a different user name there - no reason really, just that Prospector didnt sound right on a property forum!
> 
> This isnt about shares, but given my recent discussions with people like Julia et al about accountants, I thought I would share it here.
> 
> ...




Hi Prospector

I am in SA also and have just recently nearly been shafted by my accountant also, which nearly cost me 1.3k. Fortunately I picked up on the bad advice and told them to adjust it, when they informed me they had already lodged it without my permission! I  then had to do an amendment. Maybe we go to the same accountant???
Also, I have been recently screwed by Lawyers and Doctors. Everyone is out to shaft you these days, this is the way you have to look at it by default, not exception unfortunately, and take it as a bonus when they dont or you are able to stop it happening. Its a shame. I understand your plight and these people who are criticising you are simply rude and ignorant. You have rights, and all too often these days they are becoming un important.


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## ghotib (25 October 2006)

Hey Diamond Finder,

How did it go? The longer you don't tell us, the more anxious I get. But it can't have been all bad. 

Maybe you're building a victory hangover?

Ghoti


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## Prospector (26 October 2006)

Ah ghotib, Diamonds, now a diamond find would fix all my woes!  
I have been 'ruminating' let's say and not partying!

It got a little heated.  My partner went with me, and he said he wasnt going to say much because I handle all the money issues.  He is a consultant in high end business and knows not to get cross either.  But even he too got a tad upset at what they were saying.

OK, the good news first!  The 'date error' in determing approximately $28,000 additional tax was indeed an error on the accountant's side.  I emailed them about my find last Saturday, but guess what!  They had found their mistake at exactly the same time as I did!  Yeh, right fellas, get your hands off it!  
So the tax we have to pay was immediately reduced by $6,500.

So then we got on to the incorrect advice provided pre sale and during settlement!  This was where it got nasty.

They say that my old accountant was not authorised to give me Tax advice because he had sold their practice to them and in December 2003 had 'left' the practice altogether.  They admit they didnt tell the clients that!  My first email hit their office on January 13 2004., a couple of weeks later but with Christmas in the middle.  And my old accountant replied to it!
So I argued that he hadnt left, he had just left one part of the practice (accounting) and moved to another part (Investment advice) so as far as clients were concerned, he was still a CPA and able to give advice!

I pointed out to them that all their emails contained the same @........com.au
They said the 'correct' ones had a disclaimer attached to them showing the business name.  I said that clients wouldnt take any notice of that they would just see the @.......com.au and presume they were receiving proper advice, esp as the guy had been our accountant for the last 10 years!

Basically they refuse to take accountability, said that having us as clients had been a financial disaster for them for the last few years (I said that was a completely offensive and he should retract that statement immediately because last year was the first year I queried their $7000 bill!)

I went home and found an email from one of the people they say was the 'correct' accountant - there is no disclaimer and there is no company name on it!  That email has now been forwarded on to them as it makes their argument fallacial!

We are at an impasse!  He is ringing me Tuesday to see what I want to do!  But get this, even though we are 'a financial disaster' he expects to keep us as clients!

So what to do....


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## krisbarry (26 October 2006)

Prospector said:
			
		

> Ah ghotib, Diamonds, now a diamond find would fix all my woes!
> ..




Here is a gucci handbag to place all those diamonds in...there's a good girl, no crying now


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## ghotib (26 October 2006)

Hmmph!!

Sounds to me as if they've gone into such deep CYA mode that they can't make sense any more. Which suggests that mediation might be worth considering?

I guess the first step is to get very clear about the outcomes you want (apart from diamonds), and then find out how much pain it'll take to get them. From your report today there seems to be quite a bit of room for negotiation. Time for a ground-clearing talk with your lawyer, and perhaps the relevant professional organisation? 

Chin up, hair up, hem up, chest OUT!! 

Cheers, 

Ghoti


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## Mumbank (26 October 2006)

Prospector

SOme years ago I had similar difficulties with a large, prominent accountancy firm in Newcastle.  When I proved them wrong and lodged a complaint with the CPA Association about their lies and deception, they promptly issued a very large bill which I either had to pay or the CPA Assoc would not listen to any complaints or force them to release financial documents to me because i had an outstanding account.  The account they raised was farcical and I could either pay it or walk away without the information I needed (I was in the middle of family law proceedings and the accountants acted for our company of which I was joint shareholder and director/secretary).

In the end I walked into ASIC, resigned myself as director, wrote to the Bank withdrawing all personal guarantees and walked away.   6 months later the company went belly up so I was lucky as I had not access to documents or financial records to find out what had happened over previous 12 months.

Sometimes its just not worth the drama, perhaps you should be grateful you didn't end up with that huge tax bill and change accountants a.s.a.p.

Smaller, more personal, accountancy firms that specialise in a particular area are often a better way to go and easier to deal with.

I know its incredibly frustrating, but the other thing is that staid old accountancy firms still have a little difficulty dealing with women and most particularly with women who know what they are talking about - as you have no doubt learnt this week.

Good luck, get your financial records and tell them to stick it!!


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## Basilisk (26 October 2006)

This year I have to find a tax accountant for the first time and I've got to say Prospector your post scared the living bejesus outta me!  :couch 

I was going to make a thread here about how go about finding  a reliable one. But after reading the replies, it's obviously going to be a case of personal trial and error, though I do like Mumbank's idea of a small specialist firm.

Maybe I should get a lawyer at the same time so they can keep a check on each other! - in case I get that ".. he doesn't work for us" bs.


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## nioka (26 October 2006)

Write it off it's not worth the hassle. Change you accountant instantly. 40 years ago I had a good accountant. He worked out of a small office with one helper. 10 years down the track he took in a son as partner and 10 years later he retired and the son took over the practice and my account. The son had big ideas, built a fancy office and took on a few partners. Costs rose and our bill rose with them. We got passed from partner to partner without our say so and they made a great mess of things. I cured the problem by asking around until I found another accountant in a small office who was good at his job. I may soon have another problem as he has just taken on a couple of partners. I,ll watch carefully.


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## nioka (26 October 2006)

Basilisk said:
			
		

> This year I have to find a tax accountant
> 
> Maybe I should get a lawyer at the same time so they can keep a check on each other! - in case I get that ".. he doesn't work for us" bs.



Now that could be a problem.


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## Prospector (26 October 2006)

Stop_the_clock said:
			
		

> Here is a gucci handbag to place all those diamonds in...there's a good girl, no crying now




Thanks for the gucci bag, STC, fortunately I dont like them anyway,and I find my reliable shopper from Target to be just as suitable for my needs.  And my green environmental bags do nicely for the groceries!

And my diamonds - well the only diamonds I have other than a small one in my engagement ring, were inherited from my grandmother.  But dont tell anyone, its our little secret that I dont have many, OK    I just like to dream about it.

Oh, and just clocked up the hours my husband and I worked in our business last week - it was 45 for me and 65 for my partner.  A little lower than normal as we had Saturday off for a change.  We are still waiting for someone else to pay us for  long service leave, we have had the business for over 10 years but our 'employer' wont give us a 3 month paid vacation, although our employees do!  And gosh, if we get sick, well, we just cant!

Get over it STC!  I wouldnt have thought a share investment forum was the best place for you to make such comments!


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## krisbarry (26 October 2006)

It was all in good humour, sorry I must have caught you on a bad day :


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## Prospector (26 October 2006)

STC, thanks for that - you know its a bad week for me, my humour has deserted me atm!  So go easy, Ok?  Ta!

I know I the overall scheme of life this is really really minor, but this month some idiot P driver left his handbrake off and crash into my son's parked car causing $5000 damage and the car wasnt insured comprehensively (he is a P driver too and the yearly premiums for a P driver were half the cost of the car) so I am dealing with the angst of all that. I got that dreaded phone calll in the middle of the night. Thankfully no kids were hurt because this happened during a teenage 'gathering'.

Then this with the accountant.  So the bills just for this are around $16,000 this month for unexpected costs.  

So not as bouncy bright at the moment.


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## Happy (26 October 2006)

Would not like to rub you wrong way.

To make it safer, I will not talk about your case, but about me.

To run my –little empire-  I have mandatory cash reserve for unforseen events.
I make it 5% of –little empire- worth.
It is CMT account, or highest interest rate -at call- account I can get with no maximum withdraw limit.
And also for this I have my credit card, which is only used for emergencies.

As to shares account, higher ASX goes higher the cash reserve.
It actually costs me money in retrospect, as I am too cashed up too soon, but being prudent and little bit conservative I have to live with it.


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## Prospector (26 October 2006)

Hi happy, I agree, I have to have a cash reserve too!  But $16,000 on top of normal every day bills is pushing it, a little!  And then I panic and think what if November is no better!

There is cash on the business, but we have to pay employees and Christmas is actually quiet for us so we need to keep that going until February.  And I cant take out business money for personal expenses, which this is!

I am looking at selling some shares to make sure I can cover it, but this will raise CG for next year.  

Maybe I could ask our dear accountant for an interest free loan


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## Julia (26 October 2006)

Hello Prospector

I'm really sorry you're having such an unpleasant time.  What strategies do you have for reducing stress?  Long walk on the beach?  Massage?  Whatever works, this is probably the time to try to do that for an hour or two.  I always find that if I step back from the problem for a while I'm able to see it more objectively than if I get angrier by giving it my whole focus.
You have training in this area.  Think about what you'd recommend someone else to do.

The dispute with the accountants appears to have reached a highly antagonistic and unprofessional level on their part.  His remark to you about your not being profitable (or whatever the wording was) is unforgivable and shows either that (a) he is very rattled indeed about the situation, or (b) he's just a very nasty sort of person who should not be dealing with the public.

It sounds as though he/they are real bullies and this is probably exacerbated by your being a woman.  He quite possibly thinks you should be home in your apron where you belong and simply doesn't know how to relate to a woman in a business sense.

Others have suggested you should just walk away.  I did that, though the amount of money involved was much less than in your case.  I did that after contacting Fair Trading and the CPA Association, both of whom were entirely unsupportive.  I could see that pursuing the matter through either of these organisations would involve stress on my part and probably zilch in the way of a favourable outcome.

Ghoti (I think) has suggested mediation.  That's a great idea.  Don't know why I didn't think of that in my own instance, particularly as I'm a Justice Dept trained mediator!   It may be that just writing a letter to this bully saying something along the lines that because it appears an equitable solution to the problem is not forthcoming you feel it would be best to seek mediation on the issue.  This should make him realise you are serious and not prepared to be put back "in your box".

(The actual situation isn't comparable, of course, but a few months ago I took this tack with some neighbours whose tree was causing huge problems on my property.  Talking to them was unproductive so I wrote them a letter and said I would be seeking mediation on the matter.  I got a letter back the next day saying they would do what I had asked and the tree was attended to within two weeks, much to my relief.  I duly thanked them very much, took some flowers round, and we are all friends again.  Sometimes you just have to let people know you are serious.)

The suggestion to have a discussion with your solicitor also makes good sense in order to clarify what your obligations (if any) are and what rights you have in the situation.

So, my suggestion would be to try to take a step back, think carefully about what you actually want out of this situation, check the legal aspect, and then put in place the necessary steps to do one thing at a time, trying to be a bit objective and less emotional about it.

But, of course, I'd be the first to say that that's much easier to say than do.  When you're upset as obviously you will be in a crappy situation like this, it's immensely hard to be objective.

All the best.  Keep us posted of course.

Julia


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## kitehigh (26 October 2006)

Sounds like good advice from Julia.

How hard it is for people to just do their jobs properly.  It ticks me of no end to have to put up with incompentant fools.  I had to go through the unfortunate case of dealing with an insurance company.  They will do just about anything it seems to get out of not paying.  In the end I wanted to take a baseball bat to them but the thought of spending time in Jail didn't appeal either.  I could relate to the main charactor of The movie "Falling Down" for awhile there.   
In the end I just have to realize as long as I have my health I can always make back what has been lost.  Although I will take a much tougher stand with all so called professionals.  Like Julia said you just have to make them realize you a deadly serious. 
 I bet the unsavioury types don't get di#ked around like the rest of us, or else they would find themselves with a couple of broken limbs to start with and then some concrete boots.   

I hope things getter better for you Prospector, like they say you never would appreciate the highs, until you have felt the lows.  And it always seems when one thing is causing a problem another will rare its ugle head just to kick you in the guts while you are down.  But I'm sure you will come away from this a stronger person so good luck.


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