topic Can a CPA on turbo tax do a Letter of Explanation? in Business & farm

Can a CPA on turbo tax do a Letter of Explanation?

dannymo9 — Mon, 27 Jul 2020 05:25:55 GMT

I am trying to refinance my home loan and they want a letter of explanation from a CPA. I am self employed as a private contractor.

They said "We can accept a Letter of Explanation from a CPA stating the business is active to clear the verification of business condition."

Can a turbo tax CPA do this? I didn't want to pay for a CPA just to ask this question and get a no and wasted the money.

Re: Can a CPA on turbo tax do a Letter of Explanation?

xmasbaby0 — Mon, 27 Jul 2020 13:15:39 GMT

No. TurboTax provides software for self-prepared tax returns. TurboTax cannot provide letters to anyone for you.

Re: Can a CPA on turbo tax do a Letter of Explanation?

dannymo9 — Mon, 27 Jul 2020 15:38:43 GMT

Well that kinda sucks. I guess I will have to stop using turbo tax because no one wants to do it due to the fact they haven't done my taxes.

Re: Can a CPA on turbo tax do a Letter of Explanation?

xmasbaby0 — Mon, 27 Jul 2020 15:42:57 GMT

Think about it. The only information TurboTax has is the information YOU entered. TurboTax has no way to verify whether the information you entered is correct or truthful. The software merely processes the data that you enter into a do-it-yourself tax preparation program.

Re: Can a CPA on turbo tax do a Letter of Explanation?

dannymo9 — Mon, 27 Jul 2020 15:45:36 GMT

Ya I know. I just thought a turbotax CPA could verify all your stuff and could do it.

Re: Can a CPA on turbo tax do a Letter of Explanation?

xmasbaby0 — Mon, 27 Jul 2020 15:54:21 GMT

Talk to your lender. it is unfortunate that so many lenders are still woefully ignorant of the fact that millions of taxpayers use software programs to file their own tax returns. Perhaps they can come up with some other way for you to show how you receive your income.

Re: Can a CPA on turbo tax do a Letter of Explanation?

AmeliesUncle — Mon, 27 Jul 2020 16:47:29 GMT

@xmasbaby0 wrote:
Talk to your lender.

I agree. You lender really does NOT need that.

Re: Can a CPA on turbo tax do a Letter of Explanation?

Critter-3 — Wed, 29 Jul 2020 13:14:41 GMT

As a professional tax pro even I cannot verify that any of my clients has an ongoing business unless I do their monthly bookkeeping and can see the actual income & expenses on the bank statements and receipts so there is no way for anyone who works for Intuit to do it either. Can you verify for me that I have an "active" business off what I just wrote ?

What you need to provide to the lender is current bank statements, the current P&L and balance sheet and the prior year filed returns ... those are what they really need. And if you don't keep good accounting records then this may be tough in the era of "proof of income" ... long gone are the days of "no income verification loans.