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CPA did not discuss rates until after bill arrived... Legal?

I'm in a weird situation.

An acquaintance, who is a CPA, offered to go over my last six years' tax returns to help me fix some errors. She offered to do this work for free at first, but two of those years were very difficult for her to check, because I had made a lot of stock trades in that time period (about 500) and she needed to review each one, which meant she had to spend a lot of time doing very dull work.

I felt sorry for her, because when she offered, she didn't know it would be such a big job. So, I offered to pay her for her services, even though I don't have much money right now, and very big debts to pay.

She said "we'll talk about that later", and instead, just kept doing the work. I brought up the option of paying her several times, and each time, she said "we'll discuss it later". We never discussed how much I should pay.

This week, she finished the work and mailed it to the tax agencies. Then, she arrived at my apartment, and handed me a bill for $3300. This bill is ridiculous in my inability to pay it, and she knows it (she knows precisely how much money I have). I was pretty angry, because she had never informed me of a price earlier, despite my efforts to discuss it with her. She told me she'd give me a break on just take $500 a month. I told her there's no way I can afford that, and told her that $300 a month will leave me with $0.00 per month for food. She agreed to $300 a month, and told me to write her 11 checks, postdated. I refused to do that, and gave her one check for $300, and told her that I'd pay her monthly, perhaps more if I have a good month (my income fluctuates, depending on business).

She was angry with this, and complained she wouldn't get paid for 11 months, and I pointed out to her that it was her that set such a high price, knowing full well I have no money.

My question is:

Is this even legal? Can a licensed CPA do work for a client without revealing how much it will cost, or her hourly rate, and just hit the client with a surprise bill, which isn't even itemized? Is $3300 really the going rate for preparing 6 tax forms? We have no written or oral contract.

I already paid her $400 a month ago for "software" she uses to do the taxes, so I'm really being asked for $3700.

I feel as though I have been set up, and am being taken advantage of.

I live in California, if this is relevent.

Update:

I understand that I needed to get her rates... That's why I kept asking for them. She would not answer, but kept doing the work. I never *approved* the work at any price, except for free. It was after approval was given and work begun that I voluntarily offered payment, but she would not discuss her rates.

Legal or not, it doesn't sound very ethical.

4 Answers

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  • Favorite Answer

    There is no requirement that any professional state their rates up front. It is assumed that any prudent client would ask if not told. Normally, such a discussion takes place before any fees are incurred, but there is no LAW that says it has to be. The law does assume that people take reasonable care before asking someone to do work for them.

  • Anonymous
    1 decade ago

    While it would have been ethical for her to be honest up front, what she did is not illegal. If she refused to give you a rate, I would have never had her do the work. I would have explained that you have limited income and unless she can give you some kind of rate so you can budget for it, you would not be able to use her services. To be honest, it's common sense, I would never have someone do work for me and not be up front about it, even if they just give an estimate. When there is something wrong with my car, I never let them touch a thing until after it's been diagnosed and they've called me and given me an estimate in detail.

    However, since there was no verbal or written agreement, I doubt she has any grounds to force you to pay but she could make a mess out of taking you to court and trying.

  • Anonymous
    1 decade ago

    Okay . at the point that you offered to pay for it... You NEEDED to get her rates.

    She also needed to GIVE THEM.

    The lessons are worth more than 3,700.00 - that's less than ONE semester at a STATE college.

    1) Don't have friends do professional work.

    2) Qualify and Quantify the work as it's being done.

    3) As for "a bill so far"...

    4) Establish a RATE!

  • Anonymous
    1 decade ago

    You commissioned and approved work without knowing the price.

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