I Fired My CPA. What Do I Do Next?

Firing your CPA is usually the easy part. What comes next determines whether the change actually improves anything, and there is a short window where a few specific actions protect real money.

Here is the sequence we walk new clients through, in order.

1. Get Your Documents Before You Burn the Bridge

Ideally you do this before you send the termination email. Either way, do it immediately.

You are entitled to your own records: the source documents you provided, and copies of returns that were filed. Under Treasury Circular 230, a practitioner must promptly return client records necessary for you to comply with your federal tax obligations, and that obligation is not suspended by a fee dispute, though a preparer may be able to withhold their own work product in some cases.

Request in writing:

• Filed copies of federal and state returns for the last three to five years, including all schedules and statements
• Depreciation schedules for every property and fixed asset, showing basis, placed-in-service dates, method, and accumulated depreciation
• Shareholder or partner basis schedules
• Carryforward schedules: NOLs, suspended passive losses on Form 8582, capital loss carryovers, charitable carryovers, Sec. 179 carryovers
• Any entity elections on file, including Form 2553, grouping elections, and accounting method changes on Form 3115
• Your QuickBooks or accounting file, and the trial balance and adjusting entries for each year

The depreciation and basis schedules are the ones people forget and the ones that cost the most to reconstruct. If your prior CPA has them and you do not ask, you may end up paying someone thousands of dollars to rebuild a decade of records.

2. Protect Your Immediate Deadlines

Before anything else, write down every deadline in the next 120 days: quarterly estimates, payroll tax deposits and returns, sales tax filings, franchise or entity-level state filings, partnership and S-Corp returns, and any extension expiration dates.

Also confirm whether your former CPA holds any third-party authorizations. A Form 2848 power of attorney or a Form 8821 authorization stays in effect until revoked or replaced. If you want them off your account, revoke it. If your new advisor will represent you, they will file their own.

Missed deadlines during a transition are the most common self-inflicted wound in this process, and penalties for late payroll deposits in particular escalate quickly.

3. Have the Last Three Years Reviewed

This is the step almost everyone skips, and it is the one that most often pays for itself several times over.

If you left your CPA because you suspected you were overpaying, the evidence is sitting in the returns they already filed. A structured review of the last three years typically looks for:

• Missed cost segregation and accelerated depreciation on real estate
• An S-Corp election that should have been made earlier, or a salary set without analysis
• Retirement plan capacity that went unfunded
• Missing accountable plan reimbursements for home office, vehicle, and technology
• QBI deduction miscalculations under IRC Sec. 199A
• Passive losses suspended that should have been released
• Basis errors that inflated gain on a sale

Under IRC Sec. 6511, a refund claim generally must be filed within three years of the return's filing date or two years of payment, whichever is later. That means there is a hard expiration on recovery, and every April a year of opportunity closes permanently. See the three-year lookback strategy, how far back you can amend, and whether it is worth hiring a new CPA to review old returns.

Amending a return does not, by itself, meaningfully raise audit risk. A properly documented amendment claiming a legitimate deduction is a routine filing. See whether amending triggers an audit.

4. Decide What You Are Actually Hiring For

Most people replace a preparer with another preparer and are surprised when nothing changes.

Tax preparation is a historical exercise: it records what already happened. Tax strategy is a forward exercise: it changes what will happen. The two are different services, often performed by different people, and priced very differently. If your complaint was "my tax bill is too high," a new preparer will not fix that. See tax preparation vs. tax strategy and why tax planning is not tax preparation.

Questions worth asking any candidate:

• Will you review my prior three years before we start, and what does that cost?
• How many clients do you have with my specific situation, real estate, S-Corp, equity compensation, whatever applies?
• When during the year do you deliver planning, and what does that deliverable look like?
• How do you price: hourly, per return, or a fixed annual engagement?
• Who actually does my work, and who do I contact in July?

The last question matters more than people expect. An advisor who is unreachable outside filing season cannot do planning, because planning happens in the months when nothing is due. See how to evaluate a tax advisor and what to look for in a real estate tax advisor.

5. Rebuild the Foundation

Whoever you hire will need a clean starting point. Expect to spend the first engagement doing some cleanup:

Books. If your bookkeeping was part of the problem, fix it first. No strategy survives unreliable numbers. See why your bookkeeper and tax strategist should be on the same team.

Depreciation schedules. Verify they are complete and internally consistent, especially if properties have been improved, partially disposed, or refinanced.

Basis. If you own an S-Corp or partnership interest and no one has maintained a basis schedule, rebuild it now rather than during a sale.

Entity structure. Confirm the elections on file match what you think you have.

6. Do Not Wait for January

The single most expensive habit in tax is deferring the change to "next year." Most planning strategies must be implemented before December 31 to affect the current year. Retirement plan documents, entity elections, cost segregation studies, accountable plans, and salary adjustments all have deadlines that pass quietly.

An owner who fires their CPA in March and hires a replacement in December has lost most of a planning year. See why waiting until next year costs thousands.

If you already made the decision to leave, the hard part is behind you. The next ninety days determine whether it was worth it.

Frequently Asked Questions

Does my former CPA have to give me my records?

Under Treasury Circular 230, a practitioner must promptly return client records that are necessary for you to comply with your federal tax obligations, and that duty generally continues even when there is a fee dispute, although the preparer may withhold certain work product in some situations. Ask in writing and be specific: filed returns, depreciation schedules, basis schedules, carryforward schedules, and elections on file.

What documents matter most when switching accountants?

Depreciation schedules and basis schedules, by a wide margin. Filed returns are easy to obtain from the IRS if necessary, but reconstructing years of depreciation detail or shareholder basis from scratch is expensive. Also collect carryforward schedules for NOLs, suspended passive losses on Form 8582, and capital losses, plus copies of any elections such as Form 2553 or Form 3115.

Can I recover money from returns my old CPA already filed?

Often yes. Under IRC Sec. 6511, a refund claim generally must be filed within three years of the filing date or two years of payment, whichever is later. Common recoverable items include missed cost segregation, unclaimed retirement plan contributions, incorrect QBI calculations, and missing accountable plan reimbursements. Each April, one more year passes the deadline permanently.

Will amending prior returns get me audited?

A well-documented amendment claiming a legitimate deduction is a routine filing and does not meaningfully increase audit risk on its own. Amended returns are reviewed before a refund is issued, so the documentation needs to be in order, but that is a reason to prepare the claim properly rather than a reason to leave money with the IRS.

Should I hire another CPA or a tax strategist?

It depends on what went wrong. If the returns were late or inaccurate, you need a better preparer. If the returns were accurate but your tax bill felt too high, a preparer will not change that, because preparation records history and strategy changes it. Many business owners end up with both functions, sometimes at one firm and sometimes at two.

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