How do other tax preparers here respond to requests from lenders for comfort letters?

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How concerned should I be about legal liability if I provide a very factual letter saying Client reported following information which served as basis of tax return I prepared?

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Just-Lisa-Now-Answer

Intuit Community Champion

I haven't had a request for one of these in multiple years.

I never said anything in them that wasn't already right in front of them on the tax return...yes I prepared the return for the past X years, yes the client filed a Sch C that was included with the tax return...I have no clue why this would help get the loan unless the bank thinks that its a forged return the client gave them, and they can still move forward without having to wait for the 4506 to be processed by IRS for verification of filing.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

Just-Lisa-Now-

Answer

Intuit Community Champion

I haven't had a request for one of these in multiple years.

I never said anything in them that wasn't already right in front of them on the tax return...yes I prepared the return for the past X years, yes the client filed a Sch C that was included with the tax return...I have no clue why this would help get the loan unless the bank thinks that its a forged return the client gave them, and they can still move forward without having to wait for the 4506 to be processed by IRS for verification of filing.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

abctax55

Level 15

Yes...you should be concerned (at least theoretically).

The AICPA has a template for what the letter should say, and so far it has worked for any client on whose behalf I've had to send it out to a lender.

It's a full page that basically says "read the g*damn return, do your own due diligence, and I have NO responsibility to you if they default on the loan (which, is what the lenders are hoping for - someone to go after if the borrower doesn't make the payments).

edit - link to example (last page):

https://www.aicpa.org/content/dam/aicpa/interestareas/frc/downloadabledocuments/third-party-verification/qa-third-party-verification.pdf

HumanKind... Be Both

IRonMaN

Level 15

If banks were on our team, I would have to say we have morons on our team. They will try anything to suck someone else in to blame ……………….. just in case the loan does go bad. If Art Linkletter was still around he could start another television show ------------------- Banks Say the Darndest Things.

Slava Ukraini!

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