What Is a CPA Not Allowed to Do?
Dimov Tax Services operates a Denver based accounting firm that provides expert CPA support, tax audit representation, payroll processing, and international tax solutions for individuals and businesses. Located at 1700 Lincoln St, they serve clients throughout the Denver area.
Dimov Tax Specialists
1700 Lincoln St
Denver CO 80203
(833) 829-1120
Understanding the Boundaries of a CPA’s Role
CPAs are among the most trusted financial professionals in the United States. In Colorado, they are licensed by the State Board of Accountancy and regulated nationally by organizations like the AICPA and NASBA. Despite their authority and broad financial expertise, there are clear and enforceable limits on what a CPA is legally and ethically allowed to do.
This distinction is essential—especially for Denver clients operating in high-stakes industries like real estate, startups, healthcare, or international business. Whether you live in Highlands Ranch, own property in Cherry Creek, or run a business in the Denver Tech Center, knowing these limits protects you from poor advice or ethical conflicts.
1. A CPA Cannot Practice Law Without a License
CPAs may be knowledgeable about tax law, contracts, or corporate structure, but they are not licensed attorneys and cannot:
- Draft legal documents such as wills or trusts
- Provide legal representation in court
- Give legal opinions on contracts or business disputes
While Dimov’s team includes professionals trained in regulatory and compliance matters, legal documents are referred to licensed attorneys in the client’s jurisdiction. This ensures you receive both accurate financial and legal guidance, without overlap or risk.
2. A CPA Cannot Misrepresent Financial Information
This may seem obvious, but CPAs must follow strict Generally Accepted Accounting Principles (GAAP) and IRS code. Violations include:
- Knowingly inflating income or deflating expenses
- Misclassifying expenses or assets
- Failing to disclose liabilities or tax positions
In Denver, these actions could trigger license suspension by the Colorado State Board of Accountancy, civil penalties from the IRS, and even criminal prosecution.
Dimov Tax Specialists enforces a peer-review system on all returns and statements to ensure GAAP and IRS compliance across every client file.
3. A CPA Cannot Guarantee Specific Financial Outcomes
CPAs can recommend strategies, model forecasts, and identify savings opportunities—but they cannot promise results like:
- Guaranteed tax refunds
- Guaranteed audit protection (only representation can be guaranteed)
- Guaranteed loan or grant approvals based on financial statements
Any CPA making such promises is violating professional ethics. At Dimov, clients are provided scenario-based planning and clearly defined risk disclosures for https://servicebucket.blob.core.windows.net/cpa-denver-colorado/cpa-firm/how-much-should-i-pay-for-a-cpa.html transparency.
4. A CPA Cannot Prepare Returns Without Proper Authorization
CPAs must receive signed engagement letters and, in some cases, IRS Form 2848 (Power of Attorney) before they can:
- File taxes on behalf of a client
- Speak to the IRS about a taxpayer’s case
- Sign a return as the preparer
Dimov ensures that every engagement is documented with signed agreements, and all e-file authorizations are completed before submitting returns to state or federal agencies.
5. A CPA Cannot Operate Outside Their Area of Competence
This is an important, often misunderstood rule. Even licensed CPAs cannot ethically or legally provide services in areas where they lack proper training or experience. Examples include:
- Offering forensic accounting without certification or experience
- Performing pension plan audits without having passed a peer review
- Advising on crypto tax or international filings without specialization
Dimov Tax Specialists structures its CPA team around areas of expertise—matching clients in Cherry Creek, LoDo, or RiNo with professionals experienced in their unique industry and needs.
6. A CPA Cannot Disclose Client Information Without Consent
Confidentiality is at the heart of CPA ethics. CPAs are prohibited from sharing client financial data without the client’s written permission, unless legally compelled by subpoena.
This includes:
- Sharing tax returns with lenders or brokers without signed consent
- Discussing client finances with family members or third parties
- Publishing or using data for marketing purposes without anonymization
Dimov’s systems use encrypted file portals and secure cloud architecture to safeguard client data in compliance with https://storage.googleapis.com/cpa-denver-colorado/cpa-firm/is-it-worth-hiring-a-cpa-for-personal-taxes893441.html Colorado’s CPA confidentiality regulations.
7. A CPA Cannot Operate With a Conflict of Interest
CPAs must disclose—and often avoid—conflicts of interest. They cannot:
- Audit a company in which they hold financial interest
- Advise two opposing parties in a financial dispute
- Provide personal gain strategies using privileged client data
The AICPA Code of Professional Conduct and Colorado state rules mandate written disclosures and, when necessary, disengagement from conflicted relationships. At Dimov, annual internal audits help maintain neutrality and transparency.
8. A CPA Cannot Commit to Services They Cannot Deliver
It is unethical and illegal for a CPA to enter into engagement terms they are unqualified or unable to fulfill. This includes:
- Promising deadlines they can't meet (especially during tax season)
- Taking on more clients than they can effectively serve
- Providing misleading information about firm capacity
At Dimov, scheduling systems and internal workflow management help balance seasonal demand with service excellence—particularly in busy periods between February and April when CPA availability tightens across Denver’s business districts like DTC and Downtown.
Summary: Legal and Ethical Boundaries of CPAs
How Dimov Tax Specialists Stays Within CPA Boundaries
Dimov's practice model is built around compliance, transparency, and client safety:
- Each service line is managed by specialists within that domain
- Client communications and representations are governed by documented engagement
- Legal referrals are offered for all matters outside the CPA scope
- Data privacy, ethical training, and regulatory review are enforced internally
Final Word: Knowing What CPAs Can’t Do Helps You Choose the Right One
While CPAs are powerful allies in financial planning, tax compliance, and business growth—they operate within legal and ethical boundaries for your protection. A truly professional CPA, like those at Dimov Tax Services, won’t overpromise, mislead, or operate outside their scope.
Instead, they’ll offer clear terms, expert alignment, and transparent communication—giving Denver clients across Lakewood, LoDo, Capitol Hill, and beyond the confidence that their financial health is in capable, ethical hands.