How to quiz an accountant?

Why not ask some technical questions and see how they respond.

E.g. what happens if i rent my house out for a while and myself rent. What are the tax consequences.

 

I think this is more what I was trying to get at. So let me re-phrase the original question:

Anyone care to share some helpful technical questions they've asked prospective accountants in the past which may have helped them make their decision?

 

I offer a free initial consult (duration varies) as I would expect a client wants to determine if they can work with me and what I can do to assist. The discussion varies and rather than being about me it should be about what you need and any q's and issues you have etc. I generally start with "how can I help you?" and take it from there.

 

If they can answer, make it a bit more curly - what happens if I am absent for 7 years, what happens if I knock the house down and rebuild.

What is the legalisation for that? Do you know the section number? (most may not)
Or which act is that in?

 

Even with a Masters of Tax i know very few of the section numbers of the top of my head. Would need to do a quick search of the Act to see the actual section number.

 

I'd ask:
How many IPs you (accountant) owns.

My accountant owns 41 IPs.

 

Your accountant shouldn't answer these sorts of personal questions.

 

Yeah, on second thoughts that might be a bit much.

But they should know s 8-1 at least.

So you could ask 'would this be deductible under s 8-1?'
they may try to bluff their way through it so you could then say 'what does s 8-1 say again?' and 'which act is it from the 1997 act or the 1936 act?'

 

The most astute, competent and commercially savvy advisor i know in this field owns zero resi property apart from hia PPOR as he feels the returns do not justify the investment and hes significantly wealthier than i am so who am i to disagree.

Owning IPs is not a pre requisite imo

 

it is a ridiculous question how many properties they own.

they have properties held by a corporate trustee of a discretionary trust they don't own it. they hold offshore properties in an offshore trust they don't own them. they could be a 49% shareholder in a property development venture that is undertaking a $50m commercial development. they still dont own it. totally meaningless question.

as sanj also rightly points out there would be many partners in international tax who are the leading experts in transfer pricing and yet none of them would own global corporate companies doing their own transfer pricing. does that mean Coca Cola or Google shouldnt use them.

 

With tax, as with any area of law, there isn't always a clearly correct answer to many problems (especially the difficult ones).

A good adviser will tell you the different interpretations of the law, the arguments for and against them and give you their opinion on the law but ultimately empower you to make the choice on what position to adopt taking into account your individual risk profile.

If an adviser thinks there is clear answer to everything run away.

The ATO has positions which are inconsistent with case law (and many others which are questionable). A low risk client might always want to follow what the ATO says. Whereas another client might be quite happy to take a position contrary to the ATO but which is supported by case law. A good adviser should be able to guide you through the different interpretations.

 

Best response on this thread yet

 

Yes well said Daniel. A good adviser should present all the issues and really guide your decisions understanding risks and benefits + concerns which may (or may not) be capable of being addressed.

Some advisers are really good technically but cant string a sentence together face to face and others are awesome at face to face but cant present a written bit of advice. Doesnt mean they are bad. Looking back to a year ago when we employed Liz who works with me we looked for someone as a tax adviser with technical knowledge, problem solving skills based on experience, capacity to communicate verbally and in writing and how they deal with a difference of opinion. All those qualities were important to us and our clients. A persuasive communicator is better than a "hell or the highway" or the "text book" approach IMO. Some advisers will tell you they know it all....I learn something new each day.

 

Perhaps a risk taker ? Or a spruiker ? Or won powerball...Or married into a family with $$$.
Doesnt mean a thing. Does he punch his wife ? Does he drink ? Smoke ? ....All value judgements IMO like basing views on religion, race, colour or orientation. I have had some bizarre clients over time - Policitians, prostitutes, thief and bookies....even a couple of transgender people.

 

as well as their own existing interpretations of the law!

 

I'm also interested in this thread as I basically do most of the book-keeping and transcribe my income and expenses into a spreadsheet and he compiles this into the tax forms and submits my return and charges $220.

I would be interested in the types of real-life problems/solutions that your accountant has been able to work through and do you need to ask for help or would a good accountant pre-empt and provide some advise.

I remember i asked my accountant a couple of years ago what i needed to do to improve my tax efficiency and his simple response was - "buy more property", good advise but a bit shallow

Should you be setting up a separate session outside of your tax return time to discuss goals and what do you guys spend on good accountancy?

 

Yes you should be setting up a specific session to go through your situation and this should be paid for and separate to your tax return. If you dont do this you cant expect anything but casual comments such as buy more property

 

I changed accountants recentley for this very reason. I decided in the initial interveiw this was the guy for me. His style was a little overbearing but I looked past that as sound advice was rattled off machine gun style and confident I will recoup the 10k+ in fees many times over.

A good one will be pro active rather than reactive IMO.