Page 2 - When Client Relationships Don't End Amicably

Kent and his wife’s personal and busi- continued working with Kent to resolve to complete the work. Kent could not
ness transactions were commingled in questions about how to treat particular provide the necessary information;
a single account. transactions, and communicated with consequently, nearly $1 million in
By mid-May 2017, Kent supplied the IRS about how to resolve Kent’s transactions could not be categorized.
the firm with what records he did have, issues. Kent was also unable to provide details
which essentially amounted to boxes The firm sent a formal agreement about roughly $750,000 in fixed assets.
full of bank statements. The firm hired to Kent along with the firm’s first As a result, the firm was unable to
an independent contractor to create gen- invoice at the end of May 2017; Kent recreate the general ledgers or prepare
eral ledgers by entering and coding tens executed the agreement on June 1, the returns. By late August, Kent was
of thousands of individual transactions 2017. Unfortunately, after Kent signed delinquent on the firm’s invoices, and
reflected on the statements. The firm the agreement, the firm was unable the firm ceased its efforts. Eventually,

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