Every year, millions of individuals and small business owners have their tax returns prepared by outside accountants. It makes sense. Taxes can be complicated so it’s a good idea to have someone who knows this stuff well – a professional – to do your year-end reporting, and do it right.
But let’s say there’s a problem with your tax return. Maybe your tax professional made a mistake. Or was negligent. Or wasn’t up to date on the rules. And let’s say this problem resulted in you owing more money to the IRS. Or even – if serious enough – it results in the IRS taking you to court. Who’s ultimately responsible for this problem? Is it your accountant?
Nope. It’s you.
Related: Cloud service firms lock customers in while nickel-and-diming them
Another example: you run a business, and every year your bank requires that you receive an audit from an approved outside accounting firm. The auditor’s opinion is clean. But then it’s determined that some of the numbers provided to the auditors weren’t correct. Or that the auditors failed to fully verify other amounts. Or even that the auditors didn’t follow proper auditing procedures. Let’s say this problem resulted in the bank pulling back your loan. It’s the auditor’s fault, right?
Nope. It’s you again.
I’ve been a licensed certified public accountant for over 30 years. I was a senior manager at one of the world’s largest accounting firms. We accountants are very, very good at covering our butts. We have lots of disclaimers. And we’re adamant about one thing: the financial statements and tax returns of a client are their responsibility, not ours. It’s their books. It’s their taxes. It’s their signature. You can’t blame us for your problems.
Of course, you can try. That’s what the Trump family and Sam Bankman-Fried have been doing in recent weeks. In two separate court cases, the former president and his sons, as well as the former CEO of the crypto trading platform FTX, have been blaming their accountants for errors in their companies’ financial statements.
“As a trustee, I have an obligation to listen [to] those who are expert – who have an expertise of these things,” Donald Trump Jr told the court. “I wasn’t working on the document, but if they [the accountants] tell me that it’s accurate, based on their accounting assessment of all of the materials, these people had an incredible intimate knowledge, and I relied on them.” According to the report, Trump Jr is an executive vice-president of the family’s Trump Organization and has been a trustee of a trust set up to hold its assets when his father was in the White House. Trump’s organization has been regularly audited for years.