Tax Preparers Unprepared: Estate Planning, Asset Protection Advice

Just in time for tax season, looks at a sobering report that reveals incompetence and abuses among the tax preparation community when it comes to Estate Planning, Asset Protection, and even Income Tax Advice in the United States

Boston, MA (PRWEB) February 13, 2014

A January 30, 2014 CNBC report by Herb Weisbaum (1) reviewed a comprehensive study and subsequent report by the National Consumer Law Center (NCLC) that uncovered widespread irregularities in the handling of financial guidance and tax returns by tax preparation professionals nationwide (2).

According to NCLC, a substantial portion of the NCLC report consists of mystery shopping evaluations of tax preparation professionals ranging from certified public accountants (CPAs) to enrolled agents and from major tax return shops such as H&R Block to lesser-known offices such as the colorfully named Mo’ Money Taxes.

Estate Planning, Asset Protection, and Income Tax Advice
from your Accountant is generally a Bad Idea States a
Recent NCLC Study

In general, accountants who only handle 1040s will not be a good choice for Medicaid planning, asset protection, wealth preservation, or estate planning advice.

According to the NCLC, the report uncovered data entry errors as well as major mistakes such as incorrect filing status and bungled Earned Income Tax Credit (EIC) calculations. sees another problem insofar as individuals relying on CPAs for financial planning: How can they trust CPAs with their estate planning and asset protection needs when they can’t even get their 1040 filings right?
Some of the findings in the report (2) are alarming according to the NCLC. The NCLC found an uncomfortably high rate of incompetence and even fraud. Tax preparation shops are used far more frequently than CPAs and Enrolled Agents; these two are registered with the Internal Revenue Service (IRS) and thus fall under government oversight, but only four states have a regulatory body overseeing tax preparers: California, Maryland, New York, and Oregon. With this report, the NCLC said that they hope to call attention to their support of legislation to regulate tax preparation services.
“Tax returns are the bread and butter of many CPA offices,” explains Rocco Beatrice, managing director of Estate Street Partners, parent company of, “and they limit their scope of taxation practice to processing returns during the busy season. It’s a good business for them, but sometimes they offer other services outside of the season for the purpose of maintaining a steady flow of income. In addition, many people depend on their accountant as a knowledgeable sound board for their entire financial planning, estate planning, and asset protection. In many instances, we find clients asking for their accountants to give second opinions on the advice we give, and very few are experts in all of these fields of expertise, but that does not stop clients from asking. It is scarey when the accountant does not know what he does not know.”
Through, Estate Street Partners, LLC offers a range of wealth preservation, asset protection and estate planning services. Mr. Beatrice holds the requisite certifications to offer and perform these services, but also leverages the attorney’s on staff to do the legal work, and the firm has 31 years of experience in this regard. “CPAs can follow a professional path that will allow them to offer estate planning and asset protection services, but not all of my colleagues choose this career option.”
“In general, accountants who only handle 1040s will not be a good choice for Medicaid planning advice, asset protection, wealth preservation, or estate planning,” explains Mr. Beatrice. “It is important to review the firm’s certifications, qualifications and experience. Just about any CPA will be able to set up a basic irrevocable living trust because they are completely revocable, but proper construction of more sophisticated tools such as an irrevocable trust agreement requires knowledge, expertise and accountability.”
“CPA firms that handle estate planning and asset protection services typically also offer taxation advice. In fact, it is a good idea to allow them to handle tax preparation as well. Tax planning is also part of estate planning and wealth management.” finishes Mr. Beatrice.
The American Institute of CPAs (AICPA) recently issued a statement (3) on the standards that their professionals must follow when dealing with clients who request personal financial planning services with regard to their retirement and estate issues. AICPA reports that the number of members who provide these services has increased by 32 percent since 2009.
Although there is strong demand for CPAs who also offer personal financial planning according to the AICPA report, not all accounting professionals are pursuing these certifications. For this reason, Mr. Beatrice recommends that potential clients should ask their CPAs if they hold the proper certifications before asking for advice in areas that may be outside of their expertise.
About Estate Street Partners (
For 30 years, Estate Street Partners has been helping clients protect assets from divorce and frivolous lawsuits while eliminating estate taxes and probate as well as ensuring superior Medicaid asset protection for both parents and children with their Premium UltraTrust® Irrevocable Trust. Call (888) 938-5872 to learn more.
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