Complaints

• Initial Complaint

  11/14/2023

  Complaint Type:

  Customer Service Issues

  Status:

  Answered

  More info

  Habib and Sons have handled my late husband and my taxes for many years. When ****** died in 2017 I continued to use their services. On 2021 one of their associates start doing my taxes. In 2022 I received a letter from the IRS requesting an audit. The associate had not submitted my Social Security Income nor my husband pension on my returns. I was presented with a $8,675.00 proposed change to my 2021 from 1040 tax return. Habib and associates contacted the IRA asking for a rebate of the penalty of $1,355. They admitted that income was omitted due to a mistake by the tax preparer. They had no concern for the 8,000+ that I owed to IRS. They claim they have no obligation to be held accountable for their preparer mistake even though it was admitted to in a communication to the IRS. Even H&R Block pay up to $6000.00 mistakes they make on clients returns. Because of the 2022 taxes my 2023 taxes are also wrong. I have paid $2000.00 and I owe $3000.00 additional dollars for ‘22. To be fair Habib & Sons paid the penalty of $1,335 but because of their associate’ mistake I am paying over $13,000.00. I have all written documentation to prove my allegations.

  Business response

  12/07/2023

  Ms. **** came to our office on March 22, 2022 for the preparation of her 2021 income tax return. We prepared the return based off the information provided by Ms. **** at her appointment. As professionals, we rely on the data provided by the taxpayer in preparing their returns and an accurate return was prepared based off of the information provided. No social security SSA-1099 or pension 1099-R were provided to us at her appointment.
  On May 4, 2023 Ms. **** emailed a letter to our office from the IRS proposing changes to her 2021 tax return. IRS showed unreported social security and pension income, therefore creating additional tax, interest, and penalties. We responded to the IRS by amending Ms. ****’s tax return to include the underreported income previously unknown to us at the time of the original filing. We asked that the IRS abate the substantial underpayment penalty due to the miscommunication from the taxpayer. This request was denied due to the tax being substantially underreported.
  Due to several factors, most notable of which was Ms. ****’s declining health, financial issues, and longstanding relationship with our firm, we agreed to reimburse her for the underpayment penalty. This is not a common practice in our firm as we rely solely on the information provided by the taxpayer in preparation of their returns. In doing so, Ms. **** had to pay only the tax that was owed due to the unreported income she received. This amount would have been owed even if the original return reported the social security and pension income. Ms. **** has not had to pay any extra tax, only the tax that was owed. We paid her penalty for her. Not only that, but we have not issued her a single bill for all of the work involved in amending her return and responding to the IRS notices. We feel we have gone above and beyond to help the taxpayer and resolve her IRS issues and believe the facts laid out above prove that.   

  Customer response

  12/18/2023

  Better Business Bureau:
  
  I have reviewed the response made by the business in reference to complaint ID ********, and have determined that this does not resolve my complaint.  For your reference, details of the offer I reviewed appear below.
  
  Peter Habib and Associates did not do my taxes for free, nor because of concerns for my health ,nor financial issues.  The last time I was there  he did not charge because he knew he was trying to correct a serious mistake.
  Habib & Associates knew that their associate, Linda Barrowman had the following documents and failed to report them: 1099-R, 1098-SA and National Financial Services statement.  Even if I did not provide the documents, as a long-standing client wouldn’t you have those documents saved on the computer and ask where are they.  Lindsey was the professional and most elderly people have a Social Security income and a Pension.
  Habib and Associates advised me to pay over the last six months an additional $5,000 to the IRS to avoid this same situation in 2023.  I took all my information to H&R Block and they agreed with that assessment and that their associate had made this mistake and Habib should be responsible.
  Attached is the letter from IRS with the proposed amount due and a response from Peter Habib & Associates.
  Of course that amount was paid and an additional amount for 2023 payment for a total
  $13,675 minus $1355.00 penalty fee that Habib and Associates paid.
  

  Regards,
  
  ****** ****

*Some consumers may elect to not publish the details of their complaints, some complaints may not meet BBB's standards for publication, or BBB may display a portion of complaints when a high volume is received for a particular business. ↩