If I think a bill from a merchant is too high and refuse to pay the full amount, does it go to collections?

Question

I recently received a bill from my CPA for $450 for doing my taxes. I am a single W2 filer, and this amount is outrageous. I am not willing to pay the full amount. If he insists on being paid this amount in full, what actions can he take? Would it go to collections, or would he sue me if he were to pursue this? If it does go to collections, can I dispute it due to that fact the bill is so high, and that I had never agreed to this price?

Answer 1

you should inquire as to what the charge is first for services like that

Answer 2

It could go to collections, but you may be able to fight it once there, or negotiate with the CPA before it gets that far. Did he give you a rate quote before doing your taxes? If not, why not? Does he perform other services for you? If so, call him and ask for a meeting to discuss your taxes. Let him know you feel that you are being severely overcharged. You may have to pay if you used a rapid refund service. The CPA has no control over the amount the bank charges for rapid refunds. The bank "loans" you the tax refund and is repaid when your refund is received by them from the IRS. They typically do charge very steep fees. The fees should have been taken from the check you were cut, but it may have been erroneously paid to you, and now they are seeking their payment. If you did not use rapid refund, then I dare say you were overcharged. For simply filing my taxes and my husband's (we use EZ so it's not complicated) we are charged about $75.00. Or I should say we were, we now file ourselves on line for free through the IRS site. If you truly believe you are being ripped off, approach the CPA and calmly and in a non-accusatory manner, explain that you think there was an error in billing. If he confirms the amount to be correct, ask him what services were performed to justify the high fee. If he doesn't yield, make arrangement to pay the bill (or not, your choice, but your credit could suffer if you do not) and let him know that you feel that you will not use him again and can not recommend his services to anyone else. The key to this is being professional the entire time...if you want any chance of him waving the fee you must be nice...he may spend some time thinking about what you said and decide to wave the fee...but if you leave in a rage, all he will think about is that he's glad to see you go...not that he feels bad for the misunderstanding and wants to keep your business. Good Luck.

Answer 3

Thing one: did you speak to the CPA about this yet? He can probably explain his bill so that you can make an informed decision, rather than just being angry and deciding to sue him.

Thing two: it has been my experience that a CPA will bill for tax services based on either the time it took to do your taxes, or the amount of money involved.

Thing three: sounds like you just dropped off your tax papers and said, "Do my taxes." A frank discussion, upfront, about what you are buying and how much it costs will save you from this sort of grief in the future.

Thing four: hiring a professional to accomplish your tax chores, or house painting chores, or car-fixing chores is not inexpensive. However, one does so because they know the job will be done right the first time.

Thing five: I'm hoping by now that you'll rethink burning the bridge between you and your CPA. Taxes are due every year, and word gets around fast.

Answer 4

I would go and get two quotes from two other CPAs stating their price for doing the same job and then add the two totals together and divide it by two to get an average.

Pay the average amount to the first CPA and tell him that is reasonable and thats all hes getting. Give him copies of the other two quotes if you like to show him how you worked out what he should be entitled to.

Tell him if he takes you to court the judge will see your point/side because you have been fair. Tell him if he wants to take it further to go for it cause he'll be waiting an extremely long time. Tell him if he takes you to court that your poor and will pay it back at $5 a month and it will cost him more in legal fees to get those few dollars out of you so its not worth it.

Even if you are referred to a collections agency I would still arrange $5 a month just to p*ss him off because its the perrogative ;)

Good Luck

Answer 5

yes they can send you to collections. I would try to resolve the with the merchant and
ask the merchant why he was charging a high amount then quoted. what additional value or steps were involved. I would also send a letter to the manger and the better business bureau if the agreed on a lower amount and now charging more without notify you of the difference prior to completing the service.

you may want to pay it not to have a collection on your credit report. Use a cheque
a put paid under protest in memo field and take merchant to Small claims court,
keep all letters and get a copy of the cheque from bank. or if you can't resolve it and did not pay it you will probably have a collection on your credit bureau that can effect you and your credit score and even if then you decide to pay collection still appears on credit report as paid but other creditors will see prior companies had to sent to collection to be paid.

Answer 6

That is an insane amount, you're right. Had you negotiated this beforehand with him?

He can send you to collections, however. You can put a letter on your file explaining if that happens and dispute it. He would have to send a letter back once a dispute was initiated to explain the cost and have it be justifiable to remain on your file.

I would get a tax prep quote from 3 other CPA's, take them to him, and ask him why his is so much higher. You may be able to solve this directly.

Answer 7

He charged you so much because you didn't agree on a price before. Why don't you go get a quotation from another CPA or two for the same work (don't tell them why), try to get it in writing (e-mail, snail mail, etc). If it's much lower, then you have grounds for settlement / defence if the other one threatens you. You can go back to him with this info and tell him that you're willing to pay him what the others quoted, is he willing to settle? At that point, he should settle.

Good luck

Answer 8

A CPA would go straight to filing for judgment, they would skip a collections agency. You can dispute, but it would be better to report the CPA to the BBB or something like that for gouging.

Bureaus don't make decisions or rulings on amounts, just the validity of the debt.

Answer 9

Yes the amount you have been billed can go to collections. If the merchant provided you services and both come to some sort of agreement as to a purchase/payment arrangement. It is your obligation to uphold your end of the bargain and pay for the services after the services have been provided. Also by paying for part of the services illustrate that you did at some point agree to purchase services.

Answer 10

First of all,he should have discussed his filing fee with you. If he did,and you chose to let him file your tax return anyway,then you are liable for his fees. I'm sure he disscussed this with you; along with the stipulations,that he either wanted to be paid "IN FULL,INSTALLMENTS,OR WHEN YOU RECIEVED YOUR TAX REFUND. If you do not pay,he will not wait to send your account to a Collection Agency. Because he is a Certified Public Accountant,then I'm sure he has had plenty of problems,with his fees,and believe me,he has a Lawyer,who will sue you for the fees. Instead of getting mad about it,ask him if you can pay him in Installments,or even take out a Garnishment of your wages. It's better to find a way to pay him,because his Lawyer will make sure,that you end up paying the both of them.

Answer 11

There is a possibility of him sueing you because that is a fairly large amount. If he sells it to a collection agency, yes they can pursue it. Tecnically they can collect forever on it. If it ends up on your credit report some how, it will come off after 7 years from date of deliquency.
Did you not know what he charges for taxes before he did them for you?