Question: Eileen, a client ask me if we can estimate an corporate tax return. I told him that I have to do the bookkeeping to come up the numbers.
Answer:
To know enough, you'd need to really know your client, this couldn't be someone you have no idea about or about their business or their knowledge of business and taxes.
If they wanted to come up with estimated numbers, you could run a return on an estimated basis to see how much tax would be owing, but of course you would want to ensure they signed off that this was not even an estimate it was a ‘what if’ scenario, based on the following assumptions and make them tell you the assumptions they used to arrive at the numbers.
I’d suggest you purchase the CGA Canada Public Practice Manual and look at the FOFI section for guidance on doing FOFI as there are two types. CGA BC also runs classes for a half day on practice management which include something on dealing with clients who want a 'what-if'.
FOFI is short for Future Oriented Financial Information (I was the contributor of this section of the CGA Canada manual many years ago now)
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