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

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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.
 
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.
 
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!
 
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!
 

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
 
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!
 

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.
 
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
 
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....
 
Prospector said:
Ah ghotib, Diamonds, now a diamond find would fix all my woes!
..
Click to expand...

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

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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
 
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!!
 
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.
 
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.
 
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.
Click to expand...
Now that could be a problem.
 
Stop_the_clock said:
Here is a gucci handbag to place all those diamonds in...there's a good girl, no crying now
Click to expand...

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!
 
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.
 
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.
 
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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