Memo – Is Your CPA / Tax Preparer Elderly? What Happens If They Pass Away?

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I get many new clients where unfortunately, their previous CPA / Tax Preparer has passed away.

As the CPA population has begun to gray, I’m seeing this situation more and more. But there are potential problems that are associated with having a CPA / Tax Preparer that is getting on in years.

The main problem is that once they’re no longer here, getting prior records from them is almost impossible.

Let me give you a scenario. Let’s say you’re a business owner and you’ve had a CPA for 20 years. That CPA passes away and two years later there is an IRS audit for a year that they prepared while they were alive. Most times the CPA has records that are not only needed for an audit, but the absence of which could make the audit impossible to win.

Many times a CPA has not left any procedures in place to service the informational needs of their clients when they pass away.

The whereabouts of your business and personal records, that your now deceased prior CPA was holding, can be in limbo and those records may never be accessible to you, putting you at risk during audits from the IRS or from a state government.

So what is my advice here?

1. First, regardless of the age of your CPA, ask them to go over the details of the plan they have put in place regarding your records if they were to pass away. Don’t allow them to give you a vague answer and tell you everything will be okay. Ask to see their specific plan, if God forbid, they were not available tomorrow.
2. Second, review your current CPAs work papers for your business and personal accounts. Make copies of any and all previous records that you currently don’t possess and save them in your permanent files. I usually recommend a seven year look back period.
3. Third, make an honest health and age assessment of your CPA. Do you feel they will be able to service your accounts for the next several years? If not, you may want to make a transition to a new CPA firm while they are still here to assist.
4. Fourth is a reminder. Your Quickbooks and other electronic bookkeeping records are YOUR property, not the accountant’s.
   1. If your CPA is keeping your master accounting records in their office, using Quickbooks Desktop Version, request that you be sent a full copy of those files on a monthly basis. Always take the time to make sure you can open them once they are received. Many CPAs erroneously believe that those Quickbooks files are their property. This is untrue. Those files are part of your books and records and are always your property, even in the case if you still have a balance due to that CPA.
   2. If your CPA is using Quickbooks Online, make sure you have the master user name and passwords. Make sure your Quickbooks Online account is owned by you and not the CPA.

I know this topic is very sensitive, but discussing the hardest and most sensitive issues with my clients, is the bedrock of my work with them on a daily basis.

You must plan for continuity of your accounting and business records. The possibility of your accountant passing away should be part of your business planning. 

Questions? Concerns? Call me on (732) 673-0510.

Click here to request a consultation or ask me a question.

Please reach out to me without hesitation with any tax, business or accounting question, and to schedule a consultation.

Tax Laws are complex.

It is very easy to make mistakes that can incur penalties.

Do you have a Tax, Accounting or Business Question?

Call Me Immediately. (732) 673-0510.

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ignoring your Phone Calls and Emails?

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Remember,

“If We Aren’t Working For You, Then You Aren’t Working At Your Best”

Chris Whalen, CPA
(732) 673-0510
81 Oak Hill Road
Red Bank, NJ 07701
www.chriswhalencpa.com

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