Cleint refuses to give us Sch. C

[TPAVP]

We have a client (he is a CPA) that refuses to give us his Schedule C so we can calculate plan compensation for him, thus calculating the appropriate contributions for the plan. He says that his comp is "well over the limit" and that he will not give us his Sch. C. He says that it is not our job to determine his compensation and we should accept the "well over the limit" answer and proceed with his contribution calculation. Has anyone else run into clients such as this and how should we proceed. I believe part of our job IS to determine plan compensation, which is not always "well over the limit". Help!!

[Archimage]

I would require him to send you a signed letter stating that his compensation is high enough to use the compensation limit of $200,000, or something like that.

[FJR]

Ask him if HIS clients do the same thing when doing their tax returns.

[Belgarath]

We use the same approach Archimage suggested. Doesn't make any difference to us whether his comp is 200,000 (or whatever figure you need) or 40 million. As long as the comp he is certifying is sufficient for what needs to be done. I suppose this could cause some problems down the road in a DB plan if 415 limits rise substantially - as long as your service agreement allows you to charge him extra if this causes you extra work...

[RCK]

I agree with Belgarath and Archimage--you don't need to know exactly how much it was, as long as it was enough to put him at the limit and as long as he certifies that.

But I also recall from my small plan administration days that there are some clients that you are better off without, and this might be one of those. If this is an isolated problem, then you want to keep the client. But if there is a pattern of mistrust and difficulty, cut them loose.

RCK

[jquazza]

If the man says it's well over the limit, he is a CPA so he should know all the implications, by all means, listen to him, that will only simplify your work.

[Earl]

I would solve for the min to keep him over the $200k limit. "Based upon Schedule C income of $275,000 or more...."

[TPAVP]

Thank you for all of the suggestions. I had him give me his compensation in writing and I will just go with that. He has a history of having Sch. C compensation that is exactly the limit (yeah, right), so we've been trying to verify it for several years, but he's not very cooperative. Thanks for all the advice!