Corporate Law Withholding services/copies due to non-payment

[LydiaCPAoffice]

We are an accounting office and I need to know if we have the right, (is it legal), to withhold services/copies of tax returns, etc, that have already been provided to the clients, sometimes numerous times, due to non-payment of previous services? The clients in question are more than 1 year past due on numerous invoices, (over $7,000), and are asking for another copy of their tax return from 2008 along with their extensions for 2009.

Any advise is much appreciated.

 

[fredrikklaw]

Client's records vs. prepared records!

If the material requested are client's own records previously provided to you to perform the services agreed on, then those materials should be returned to the client even if you are owed money for services rendered.

But if the material requested are documents, or copies of documents which you prepared from scratch for the client as part of the agreed on services, then you are well within your rights to refuse the request unless on full payment of all monies owed to you prior to releasing the documents, and even then you can charge extra the cost involved in copying and mailing the documents.

Hope this little info helps.

fredrikklaw