Why your last CPA missed it

Somebody looked at your position and found something, and the first question is not about the finding. It is about the years before it. How did nobody see this?

Deborah Daniel, CPA

24 Jul 2026 · 7 min read

A woman sits at a kitchen table with an older woman, papers and a calculator between them.

It is a fair question and it deserves a straight answer, because the usual answer people reach for is wrong and it makes them distrust the whole profession.

In most cases the previous firm did exactly what it was engaged to do, competently, on time, for the fee that was agreed.

The misconception

That it was incompetence. Sometimes it is. Mistakes happen and some firms are better than others.

Far more often the work you are comparing against was never the work being performed. You are looking at the output of one service and judging it by the standards of a different one.

What compliance work actually is

Compliance is scoped, priced and scheduled to produce an accurate return from the records provided. Every word in that sentence is doing something.

Scoped means the engagement letter describes the return and not much else. Priced means the fee reflects the hours that task takes. Scheduled means it happens in a compressed period when a very large number of clients need the same thing at once. From the records provided means the inputs are what you sent, in the state you sent them.

The return was an accurate report of a year that nobody was managing while it happened.

Inside that engagement, the question being answered is what the correct figure is for what already occurred. It is not what could have been arranged differently, because the answer to that question would have had to be given eight months earlier, to a person who was not asking, in a conversation nobody was paying for.

Planning is a different engagement with different timing. It happens while the year is open, it requires projections rather than records, and it involves decisions about structure, timing and payment that have to be implemented before the year ends.

Most firms do not sell it. Not because they cannot do it. Because compliance is a repeatable annual product with predictable delivery, and planning is bespoke, harder to price, and requires contact during the months when the firm is recovering from filing season. So it does not get offered, and what is not offered does not happen.

How much difference it makes

Worth keeping qualitative rather than attaching a number, because the honest answer varies enormously.

For plenty of businesses the difference is small. The structure already fits, the income is straightforward, and a good preparer capturing everything correctly has captured nearly all of what is available.

For others the difference is significant and repeats every year, which is what makes the discovery sting. It is not one missed item. It is the same item missed in each of several years, because the thing that was wrong was structural and structural things persist until somebody changes them.

What this requires

Being clear about which service you are actually buying, and reading the engagement letter to find out.
Knowing when the conversation happens, since planning discussed in March is a report rather than a plan.
Providing projections and not only records, because planning runs on what is expected rather than what has closed.
Accepting that it is separately scoped and separately priced, and judging it on what it identifies.

A useful test. Ask when your advisor last contacted you between June and October about something other than an extension. If the honest answer is never, you are buying compliance, whatever the relationship feels like.

That is not a criticism of them. It is information about what you have.

Who this is not for

Plenty of businesses need compliance only, and are well served by it. This should be said plainly, because the alternative is a firm selling planning to people who do not need it.

A business with straightforward income, a structure that already suits it, no property, no equity compensation, no transactions in prospect and no unusual items, is mostly buying accuracy and timeliness. A good preparer at a sensible fee is the right answer, and adding a planning engagement on top would be paying for a review that finds very little.

The same is true below a certain profit level. If the tax at stake is modest, the fee for planning is a large share of anything it could identify, and the honest recommendation is to stay with compliance until the numbers change.

What matters is knowing which of these you are. The problem is not being served by a compliance firm. It is being served by one while believing you are being advised.

When this happens

Planning has to happen during the year, which is why a filing season relationship cannot produce it. By the time the documents arrive in a folder, the decisions that would have changed the outcome were made months ago by somebody who was not thinking about tax.

This is the structural reason, and it is not about effort. A firm seeing you once a year, in the busiest period of its calendar, holding only completed records, is not positioned to do planning even if everyone involved wanted to.

The point

Your last CPA probably did the job accurately. The question is whether the job included anybody looking forward, and for most engagements it did not.

That is the difference between preparation and planning. Your Charter team works during the year, when the decisions are still decisions rather than history.

Where this goes next