Filing Tax Nightmare

[Christina B.]

We have been with one CPA (CPA/lawyers firm) for the last 7 years (they filed our 2017 taxes and every year since then). At the end of Nov. 2023, they informed us they were no longer going to file taxes and were moving solely to litigation. They amicably moved us to another company which was bought and moved to new ownership January 2024. Although I submitted all paperwork, etc. on time (in Feb. 2024), after repeated emails back and forth requesting status, the new firm filed for an extension at the start of April. (In our entire lives, we have never filed for an extension and never had to.) The firm insisted they needed more time to complete the work as in 2023, we had a 1031 exchange. They did not provide us with any figures regarding possible taxes owed or quarterlies so I had to estimate those myself and pay them on time. After repeated emails in May asking about the status and hearing vague "we're working on it", I lost patience in mid-June (as again, there was no work for me to review) and I asked the previous firm if they would take us back. Without the 1031, the filing is fairly straightforward. The original firm agreed to and it seemed all was good.

Previously, we paid around $750 to file federal, and 2 state returns. I started becoming concerned when our bills hit the $2500 mark and asked if it would reach much higher. They said not more than a few hundred. However, I had questions and concerns over how they calculated cost-basis, so several emails later, after agreeing they had to recalculate, we were ready to file. Although the bills at this point reached over $4K, I was inclined to let it go because I was grateful it was done. Then we got a written letter from the IRS saying the signature page was not acceptable and had to be re-filed. A month later, another letter from one of the states saying the same. This particularly irked me because I had brought over the physically signed pages to their office. I then received further bills which brought our total to just under $5K as they needed a temporary POA to rectify things.

When I received a bill in January 2025 for a technology fee, I questioned why it hadn't been applied to our bill in the previous months. I paid it but then received notice they would not be filing our taxes for 2024. At that point, through searching on this group as well as reaching out to my network for leads, I found a great EA who has a robust practice and came highly recommended. She took us on and her only request was for the original firm to provide the depreciation detail listing for 2023. That's when things slowly started to unravel.

To this day, despite repeated requests, the original firm has never provided that listing. They did provide an alternate 2023 tax return that they said was not filed which led to confusion. We had to look over returns back to 2020 to discover that depreciation was not captured correctly on the 2021, 2022, and 2023 returns. The EA thinks it might have been a software issue since she said those should carry over each year. When I went back to the original firm requesting a refund, they insisted on correcting those returns with zero refund (although at this point, the EA didn't trust them to do 2023 correctly especially with the 1031, which is one of her specialties). They also insisted on filing those from their office (when the EA wanted me to follow her specific protocol for snail mailing them).

Fast forward: I received the amended federal returns still with no depreciation detail listing and a fairly hostile email that said they would not file the returns. I emailed for clarification as the owner of the firm via email had already written he wanted to file the returns, pending our approval. The EA also found some minor mistakes along with a slightly larger one (they hadn't depreciated the hot tub at our STR and chosen instead to expense it although it was almost $15K). More significantly, they hadn't provided the amended state returns for those years. That was back on March 7 and I've heard nothing since despite another email and vmail on my part.

I realize it's Tax Season, that there are 2 sides to every story, and that end of day, even if I have to pay the EA to amend all the returns for 2021, 2022, and 2023 along with her doing our 2024 returns, that's what I need to do to get this cleaned up. As they're lawyers, I'm reluctant to press this further and our lawyer (separate entity) initially recommended reaching out via email to request the refund and work with them (which we tried). But I have learned a lot (about taxes, selecting a tax professional, etc.) and with appreciation to this group for the advice you've dispensed through the years, my question is: what realistic recourse do I have and would you advise just letting this go and moving on? (It's been very stressful and while I do want to detach emotions from this, we trusted this firm and worked well with them for years, paid all their bills, and this is how it ends?)