Nobody wants to deal with an audit by the Internal Revenue Service (IRS). To that end, it’s not unusual for businesses of all sizes to have an accountant handle their financial records and prepare their taxes.
That’s great — as long as you can trust your accountant to do their job. Otherwise, you could find your money missing and an IRS agent asking questions.
How do you know if an accountant is bad news?
Whether you’re just starting work with a new accountant or you’ve been working with one for years, here are some signals that it’s time to find somebody new:
- You suspect substance abuse. If you have any suspicions that your accountant is suffering from drug or alcohol addiction, you need to get your accounts out of the situation immediately. That’s a red flag that could lead to theft and other liabilities.
- You can’t understand the financial statements. A worthwhile accountant should be able (and willing) to explain your financial statements to you and help you understand what they represent.
- Your accountant doesn’t seem to understand the law. If your accountant isn’t staying up-to-date on the changes in the tax codes or doesn’t understand your industry well enough to recognize what you can deduct, you’re missing out.
- Their office looks like a disaster zone. Really, how confident can you be in your accountant if they have files spilling everywhere and are utterly disorganized? Accountants have a reputation for being neat and orderly for a reason: Their livelihood depends on those traits.
- Your accountant missed a deadline. All your tax deadlines need to be met in a timely fashion. Absent a true emergency, there is no excuse for late filings.
Finally, there’s one other thing you should consider a major problem: If your accountant seems to be avoiding you or isn’t returning your communications in a timely manner, that’s a sign that either they’re having problems or you aren’t being treated like a valuable client.
If problems with your accountant have led to a tax crisis with the IRS, don’t wait to seek help.