Staggering into the 21st Century...

[Koss]

The recent thread on "Post Office Service" got me thinking...

I've been doing income taxes long enough that I remember, as if it were yesterday, when HRB and other storefront chains were charging extra for electronic filing, even for clients that paid up front, and had no need for a "bank product."

And I know some smaller firms and independent tax pros still charge separate fees for electronic filing, while others choose to simply absorb the cost within the general fee structure.

I haven't heard it said very much, but I really think we're moving in a direction where eventually e-file will be the only option, even for individual returns. Electronic filing is already mandatory by IRS standards for many types of information returns and other types of filing by business entities.

Some pressure for mandatory electronic filing may actually come from the private sector, rather than from the IRS itself...

Personally, I support a private sector approach in which we could begin to charge an extra fee for those that insist on paper filing. To take it one step further, some tax pros could potentially reduce overhead by a significant margin by charging extra for a paper copy of the return. In other words, you give your client only a paper copy of what they signed, such as the Form 8879. Their copy of the complete tax return is delivered as an encrypted PDF. If they feel they need a paper copy, they can either print it themselves, or pay extra for that service. A PDF complies with the IRS requirement to provide the client with a copy of the return...

As a loose analogy, think about stock certificates.

In some cases, you just can't get them anymore.

When you can, there is an outrageous service fee associated with it.

One day... when I'm long gone...

Perhaps my great-great grandchildren will make a fortune on e-Bay...

by selling original hardcopy tax packages as collectibles.

The ones with color on the front and back covers--blue for 1040, pink for 1040A, and green for 1040EZ... color forms inside with the instructions.

And it will command a premium price at auction if it has the original taxpayer's label on it...

And if you have one that is old enough to have the taxpayer's social security number on the label...

Well, forget about e-Bay. Maybe you should be calling Sotheby's.

You heard it here first.

Give it about five years. The paper tax packages won't exist anymore.

Paper FAFSA will probably become extinct first.

BMK

[Snaggletooth]

Rejected E-files

I would agree Burton, but first we have to come to grips with the returns that simply won't e-file.

For example, my most common rejection is where an ex-spouse has raced down to HRB to claim a child as a deduction and get their EIC. In many cases, the ex-spouse has no right to claim, and my only remedy for my client is to have him(her) file a paper return. You would think the IRS would police this travesty, but I haven't seen it. Ever.

The right to claim a deduction should not be vested in whichever spouse gets their W-2 first and can beat their ex-spouse to the tax office in a foot race.

The IRS, the computer gurus, the IT crowd, and others are anxious to shove us into a world where their interests can best be served by push buttons. I hope they don't leave the interests of the taxpayers behind.

[Uncle]

The recent thread on "Post Office Service" got me thinking...

Personally, I support a private sector approach in which we could begin to charge an extra fee for those that insist on paper filing. To take it one step further, some tax pros could potentially reduce overhead by a significant margin by charging extra for a paper copy of the return. In other words, you give your client only a paper copy of what they signed, such as the Form 8879. Their copy of the complete tax return is delivered as an encrypted PDF. If they feel they need a paper copy, they can either print it themselves, or pay extra for that service. A PDF complies with the IRS requirement to provide the client with a copy of the return...

BMK

I have been doing that for the last two seasons. I have been charging $20 extra for paper filing and $20 extra for a paper copy. The signature copy is also not required if the client signs the 8879 electronically or the signature is captured directly on the pdf 8879. I suspect that I will raise those fees substantially next year.

[erchess]

Reflections on Efiling

I already charge $20 extra for a return that can be e-filed but is being paper filed unless there is an unusual situation such as the one Snags apparently encounters more often than I do. Depending on how the economy does in 09 I may not increase most of my fees but I already plan to raise this one.

I would respect the right of any given tax professional to offer only PDF copies of returns or charge extra for those clients who insist on paper copies. I may even choose to adopt this practice next year since it might mean that for clients who own computers and printers I did not have to lug my printer and paper into their home or office or incur the expense of a paper folder. (As most of the regulars here know, the only place I will see a client is their home or office or a public location.) Like Burton, I think printed returns will eventually disappear although I am not sure this will happen as soon as he seems to think. However, I am sure all of us would respect the right of clients to choose those tax professionals who are among the last to stop offering free paper copies.

[JohnH]

I don't charge extra for paper filing.
But then I don't e-file at all, so I think on balance that's fair to both the client and to me.

[Bees Knees]

MN requires all of us to e-file, or pay a penalty per return. The year that requirement became law, I started to e-file every return. I’m glad I did, because those returns that cannot be e-filed are a big pain for me now. It takes way longer for clients that I cannot e-file. I like the idea of charging extra for paper returns. I think I am going to do that next tax season.

I also started to e-file all extensions this year. Much faster an easier, plus I actually get an acknowledgment from IRS that the extension was accepted.

For me, e-filing is a non-issue. Those of you who continue to file paper returns are like those who continue to insist on not using a computer. Yes, I use to be one of you. I still have the callous on my finger from when I did every return by hand.

Been there…done that…I’ve moved on.

[AJsTax]

Interesting!!

I find all this interesting. There is plenty of room and business for those who want to do it a different way. I had a couple new clients this year that received their return pdf burned on a cd last year. They *****ed up a storm. would never go back there. Pain in the ....
I do not see any saving in time or money when you have to buy the cds and take the time to burn them. anyone???
We just finished a lot of returns this year. Lots of new ones. For the system here it is much easier and less time consuming to just print the return, have the client pick it up and take it from there. no hassel with efiling, no hassel with getting the 8879 signed by both (royal pain !!). I do not know what this office will do in 2 years when Ohio forced efile.
For us it is much less expensive to print and file paper.
I will always give a paper copy to my clients as long as I am in business. Pdf backup if they want it, ok.
Just my thoughts after a busy and successful tax season.
now on to the huge pile of 941s and qtrly reports waiting on me!!!

[Jiggers]

Fees for e-filing versus paper returns

I don't prepare returns with the client present. Too complicated.

But it does take time to process the 8879 and then get the required signatures when the client picks up the return and then e-file, get the ACK, etc. I charge an extra $10.00 fee for e-filing.

For paper returns, I charge a base fee of $6.00 plus $0.50 per page.

Either fee is just added to my tax return fee and not identified.

[Koss]

Burning a CD?

My thought is that our more sophisticated clients would accept e-mail delivery of an encrypted PDF.

I do have some clients that don't own a computer. I have others that own a computer, but it is four years old, with Windows SP1, and they might actually have trouble opening an encrypted PDF. If they have Adobe Reader at all, it's probably Version 5.0 or something.

So I recognize that this approach certainly would not work with all clients. But I have some clients that would probably prefer a PDF delivered by e-mail intstead of a paper copy of the return, or maybe even just a passphrase that would allow them to download the PDF from our website.

BMK

[Burke]

I don't really have an aversion to efiling a tax return, but if I were a taxpayer, (and I am) I would sure want a paper copy for my files. The technology just changes so fast. First of all, most computers either crash or are obsolete at the max every 3 years, we have gone from 5 1/4" floppys, to 3 1/2" disks, to CD's, to CDRW's, to USB ports & sticks, and today I heard that storage on the Internet is the wave of the future. None of the old storage systems are used any more and there are no systems to retrieve them on anyway. Whereas I can pull my files and look at 10-20 years of tax returns for a client in some cases. And in less time than I could access them by computer, assuming I even could. After all, we are still able to read documents written 5,000 years ago. Do you really see the world going completely paperless?

[Uncle]

I don't really have an aversion to efiling a tax return, but if I were a taxpayer, (and I am) I would sure want a paper copy for my files. The technology just changes so fast. First of all, most computers either crash or are obsolete at the max every 3 years, we have gone from 5 1/4" floppys, to 3 1/2" disks, to CD's, to CDRW's, to USB ports & sticks, and today I heard that storage on the Internet is the wave of the future. None of the old storage systems are used any more and there are no systems to retrieve them on anyway. Whereas I can pull my files and look at 10-20 years of tax returns for a client in some cases. And in less time than I could access them by computer, assuming I even could. After all, we are still able to read documents written 5,000 years ago. Do you really see the world going completely paperless?

Nonsense. Clients brought me data on 3.5 diskettes, cds, and flash drives this year, and I had no problem using any of them. My files go back 34 years and all are available and easily readable. Some of my client's paper files have moldered away to the point of being unreadable and unusable within a dozen years. Trying to reconstruct basis with boxes of moldy unreadable papers sure puts your claim of 5,000 years in the proper perspective.

[joanmcq]

Keep your files drier? Of course I don't live in a wet climate (or at least the wet of winter dries out really well in my attic space in the summer) but I will always give a paper copy unless the client specifies they don't want one (and even then its my long distance ones). at our office we already have a problem with an in house program based on acrobat 5.0. So the computers that run that program can't have updated acrobat, and if you want to research something, say, pull up IRS instructions while using one of these machines, they can't read the PDFs.

So yeah, the march of technology will always be a problem. But after I started efiling, I never looked back. and extensions??? you can't ask for a better date stamp.

[thomtax]

Exactly right Burke.

To put things into perspective, I have no phobia against computers. I have a "Certificate in Computer Systems Technology" from the college and am currently in a program of study for Computer Forensics. I am also a big proponent of efile.

However, I would lose at least half of my clients if I tried to stop them from having a copy of their tax return and hand them a CD. To be honest, if a preparer tried to hand me a cd instead of a tax return, there is no question but what I would go to another preparer. If a school or mortgage company wants a copy, it is not necessary to get to a computer and print something out, if the computer has the right programs. You just run it through a copy machine.

This is not meant to be offensive to anyone, but I choose to decide for myself if I want to go into someone else's idea of getting into the modern age.

LT

[JohnH]

I follow several backup procedures, including flash drives, CD's, and online storage, but I still give clients paper copies of their returns. I've never seen a scratch render a piece of paper unusable.

[BHoffman]

Paper copies to all clients. I'll give them a .pdf if they ask for it.

I'm not going into the modern age without some sort of fight. I have a cell phone. It's never turned on and I have it only for emergencies. No client has the number. I'm not interested in those Blackberry thingies either.

Hurray to the flash drive and those nifty little external hard drives for back ups! Use those all the time