June 8, 2021
I have known Mr. Harvey Lubowitz for the past 12 years. He worked on my personal returns when I was a W-2 employee. When I went on my own and started a business and needed him on an ongoing basis, however, many red flags started to emerge. Mr. Lubowitz did not seem to know what he was doing. For instance, we would do joint conference calls with Vanguard because I have a solo 401k with them, and he would ask tax questions to people who were not accountants. This occurred several times. One time (and I will never forget this), the representative told Mr. Lubowitz to ask the accountant who was in charge of my account because they didn't think Mr. Lubowitz was an accountant.
Another red flag has to do with Mr. Lubowitz' billing practices. He does not give itemized billing. When you ask for them, Mr. Lubowitz becomes defensive. One time, I asked Mr. Lubowitz to supply me with an itemized breakdown of his invoices by email. He then calls me several hours later and irately asked why the hell would I ask for them. He tried to bully me, and I backed off. He quotes his fees like he makes up his numbers from thin air. There is no fee agreement and I never even knew what he billed per hour. I still don't know.
Mr. Lubowitz made mistakes in my filing that he never took responsibility for. For instance, in 2020 we elected for my company to become an S corp. But for 2020, he filed me as a C corp because we never had confirmation from the IRS. I would later learn from my current accounting firm that this was not the correct process. Mr. Lubowitz should have filed me as an S corp for 2020 once the election was made-regardless if the IRS confirmed the election or not. As a result, since he didn't file me as an S corp, the IRS rejected the C corp filing. As a result, Mr. Lubowitz called me, on the night of the tax deadline, and demanded that I take several hours out of my schedule to call the IRS and to see what was going on. I had a business meeting that night and I was beyond annoyed by this, considering I was paying Mr. Lubowitz for his services. The IRS and state would later take out approximately $12,000, but this was incorrect because we shouldn't have filed as a C corp. As a result, the IRS and the state will have to reimburse me this money, but I would later learn from my current accounting firm that this may not happen for a year or more due to COVID. Mr. Lubowitz was never forthcoming about this. So, I am out of $12,000 for at least the short-term future because of this error.
The final straw for me came when Mr. Lubowitz arranged for the IRS and the state to take out $15,000 of S corp money, but Mr. Lubowitz never told me they were going to take out this money from my personal checking account (I keep all of my business money in my business account and 1-2 months of expenses in my personal checking account). As a result, my check account bounced and my checking account was $16,000 negative in the hole. I incurred fees.
When I told Mr. Lubowitz about this, he simply told me to "calm down" and that it was "no big deal". I would later learn from my new accounting firm, however, that because the money was not paid before the deadline, I could be hit with approximately $1,000 worth of penalties from the federal and state. This happened simply because Mr. Lubowitz "forgot" to tell me to transfer the money.
To cap this all off, I actually did not need to pay approximately $15,000 in taxes, but $10,000. When my new accounting firm reviewed my books, they noticed that Mr. Lubowitz duplicated my income and did not bother to ask me what the correct number was. As a result, I would have given the federal and state government an extra $5,000 in taxes.
However, the worst part of my arrangement with Mr. Lubowitz was his unprofessional attitude. Not only would he would talk bad about his other clients to me, he would put me down or call me with a lot of anxiety. Then, when I would ask him t