Review Notes – To Keep or Not to Keep – That is the Question - Clarity Practice Management
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Review Notes – To Keep or Not to Keep – That is the Question

Review Notes – To Keep or Not to Keep – That is the Question

If Shakespeare had been a CPA, he would have written the following about review notes.


“To be or not to be.  That is the question.  Whither it be nobler to allow discovery by hostile attorneys or consign the notes to the external damnation of the shredder.”


I’ve been reading practice management guidance lately that recommends not keeping tax return review notes.  Trashing review notes shields you from the obligation of producing them in the discovery phase of malpractice litigation.  However, from my experience in litigation support, here’s how the questioning will go:


Attorney:  Do you review tax returns prepared by your staff?


CPA: Yes


Attorney: Do you document those reviews?


CPA: Yes


Attorney: Why didn’t you produce the documentation of the review in this case as required by our discovery request?


CPA: We don’t keep them.


Attorney: Do you discard them to prevent discovery in malpractice cases?


CPA: Well……


How does that look in front of a judge and / or jury?  You know exactly how it looks.


The next round of questioning will cover whether or not the CPA violated professional standards by destroying documents supporting the procedures performed or even alleging a deliberate coverup of known deficiencies.    If you’ve been in court before, you know a malpractice case is lost once the jury believes professional standards were violated.


If you missed something reviewing a tax return, and you end up in litigation, whether you have review notes matters not even a little bit.  You missed it, and the plaintiff’s attorneys will happily point it out one way or the other.


Of course, be careful compiling review notes.  Years ago, I was quite witty in my review notes to preparers.  Years ago, I wasn’t too bright.  Here’s one I wrote about fifteen years ago regarding a client’s real estate losses.


“Another Donald Trump bites the dust.”


Here’s another.


“If you got frequent flyer miles for losses, this guy could fly for free to Mars.”


Witty yes.  Smart, no.  There’s room in life for wit, but I was being a nitwit.


Now I’m Joe Friday from Dragnet.  “Just the facts ma’am.  Just the facts.”


Life just isn’t as much fun when lawyers are involved.  So keep the review notes and discard the witticisms.


Thanks for reading!

Frank Stitely, CPA, CVA

Former nitwit


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