Law firms periodically receive requests for advice from CPAs regarding a client’s need to come into compliance with the relatively new and sometimes confusing “economic nexus” or “Wayfair” rules for selling goods or providing services to customers in another state. Often, the client realized only recently they had a sales tax collection problem and are now hinting (or more) that their CPA firm should have either warned them or voluntarily stepped in to handle the new compliance issue. The most common responses heard from CPAs to these client complaints are, “You never asked us to look into the issue, and that’s beyond the scope of our engagement,” or “We thought you were … or someone else was … handling that for you.”

How far can or should a CPA firm stray outside the scope of its engagement to please a client? Is educating clients on topics that fall outside the scope of the CPA firm’s engagement really the firm’s responsibility? An Asheville, N.C., CPA firm is facing similar questions after a client, an online retailer, filed a tax malpractice suit against the firm in North Carolina Business Court.

Republished with permission. The full article "A Cautionary Tale: Challenges for firms in Wayfair compliance" was published by The Tax Adviser on December 1, 2023.