Final answer:
A CPA generally should not withhold client records necessary for statutory obligations, despite unpaid fees, according to AICPA and many state boards' ethical rules. CPAs can retain certain documents they have produced, and should have clear policies outlined in their agreements to prevent disputes. Legal resolutions may be necessary if disputes regarding records and fees cannot be otherwise resolved.
Step-by-step explanation:
Can a CPA refuse to return a client's records if there are unpaid fees? The answer to this question depends on the governing laws and ethics regulations of the state in which the CPA practices as well as the specific circumstances of the case.
The American Institute of Certified Public Accountants (AICPA) and many state boards have ethical rules stating that CPAs should not withhold client records that are necessary for clients to fulfill their statutory obligations or to access their financial data. However, CPAs might have the right to retain certain documents provided by them, such as working papers, until their fees are paid. It is important for CPAs to be familiar with their state-specific laws and the Code of Professional Conduct when making decisions regarding the release of client records.
It's always recommended that CPA-client agreements should clearly outline the policies for handling unpaid fees and the return of records, to prevent misunderstandings. If disputes arise, both parties may need to seek legal resolution. As such, it's crucial for a CPA to communicate with their client regarding any outstanding fees and attempt to resolve the situation professionally before it escalates to withholding records.