Clients Who Know More Than the Preparer

[Chief]

I have a client who came to me in 2003 and then came back in 2005 for return preparation. She insisted both times that I use the information she had prepared in lists rather than letting me see her 1099's and other documents. She also insists on no e-filing. Her tax bill was around $7,000 even tho she had paid at little over 1,000 in estimated tax. She took her return and then called back. The cost on the house they had sold was $7000 instead of $25000 which she had claimed originally. One of her interest entries was tax exempt which she told me after the return was done. She had sizeable interest as income more than 30 entries, and quite a few dividends.
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She was afraid I was going to charge her $80.00 again to correct her return. I told her no that there would a minimal charge of $20 to correct the return. I dont think she liked that. This couple's income is over $80,000. I had told them before to check with me if they sold any capital assets during the year and I would advise them of an increased amount of estimated tax to pay.

I remembered too late that I had told her in 2004 for the 2003 tax year to bring her tax documents to me. It was just too tricky not to see the tax documents when preparing returns. She did not, and again I prepared their return from the information she had given me.

NO MORE!!!!!!! My clients will have their tax documents or they will have to go somewhere else. This is just too shaky for me to get in that situation again.

Thank you for the opportunity to vent.

[Bird Legs]

Vent Away, Chief

Had one like that the other day. Have been doing their return for several years.
He had all kinds of paperwork in a box here in the office and started handing me
the notes that he had prepared.
Told him that was fine, and appreciated that, but I also wanted the backup material
from where he got that info.
Why do you need that he asked. Told him I needed to make copies for my files.
He remarked that, well, you might have to use more IRS forms and that would raise
your fee.
Told him that if that was necessary, then that is what will happen.

[Snaggletooth]

Chief

As you no doubt have experienced, one of the BIG problems with clients is that they cannot interpret information statements. Seems like W-2s are simple enough for them, but anything else? I would absolutely not trust them. I have to see the documents themselves. And if there is a deferred compensation arrangement, then they even need help with their W-2s.

I do not insist on adding up receipts for farmers and businesses. If they have a total amount spent for feed or supplies, I take the number and run with it. It is the auditor's job to add up all those tickets if he wants to.

Back to the documents. How many clients do you have who are capable of interpreting a 1099-R with a "P" on the distribution code? Big trouble here. What about the 1098-Ts from educational institutions? Credit Union so-called "dividends" which are reported as 1099 - Interest, and Mutual Money Market "interest" which is reported as 1099 Dividends?

I cannot leave the client to interpret this stuff, write it down and then give it to me.

[jainen]

I'm always uncomfortable

I'm always uncomfortable when a client insists I do the entire return from his own lists. Why does't he want me to see the source documents?

[Brian EA]

Its Scary.

I have a note page where I record every thing I am not sure of. eg. Client did not provide 1098 from mtg company. I also let them know that I am recording this info.
These days you have to cover your self.

LET IT OUT MAN !!!!

[Matt Sova]

Trust

It depends on the client. I only have a few clients that actually fill out my organizer completely. One guy only brings his W-2's and puts all the other info on the organizer. Gut feeling is I do trust the guy so I do not worry about it. It's the ones that ask the shady questions that I worry about.

I do have a question though Chief, I am inferring from the original post that you charged $80 for the return with THIRTY interest items and quite a few dividends? Is that average for your neck of the woods? I don't mean to be nosy, but that seems very, very low. I bet HRB would even charge a heck of a lot more.

[Chief]

Fees Charged

Matt Sova:
So far I have only compared fees with a preparer in a rural setting east of me. He is less than me. Yes I agree my fees are too low. I've notice Block offices I drive by daily are pretty much empty. They do charge about twice what I do. I've never been told that I am too expensive but I did get that notice from the client I mentioned. In the Tampa Bay area everything here is more competitive than in other places I've been including the Midland Bay City area. I may check with Linda in the Lakeland area to see how we compare.

[Snaggletooth]

St. Petersburg

...has its influence. Lots of retirees with marginal need to file to begin with, and a sector of our society very resistant to prices. Tampa is right across the bay, and ultra-conservatism in spending prevails from Clearwater all the way to Ft. Pierce. Obviously their housing market is very good, but retailing in general sucks.

Orlando is a different world with WORKING people willing and able to pay higher prices for everything. Orlando/Canaveral is literally exploding, with refugees from the Miami area. I don't live there, but have friends who do.

80 bucks is cheap (even for that area) for dozens of information statements. But I would say a median price for the same service would be about $150. I think Chief is like me - doesn't depend on his practice for his entire livelihood. My price (rural South) would be maybe $100 or more if there were nothing more than these information statements.

[Matt Sova]

Just curious

I hope I did not come off as offensive. That is interesting. I know where I am if I was to move my office about 45 minutes east I could probably charge 150% to 200% of what I currently charge. Currently I charge $150/hr.

[Snaggletooth]

Not offensive

Matt, you had a rare unoffensive moment.

Yes, Auburn Hills would be the summum bonum for accounting fees. Plus I think they need some good CPAs.

[Chief]

Matt

I hope I did not come off as offensive. That is interesting. I know where I am if I was to move my office about 45 minutes east I could probably charge 150% to 200% of what I currently charge. Currently I charge $150/hr.

Not at all Matt. I could never imagine you being offensive. You are a skeeter swatter, and in my book that's alright. I dont blame you, I wouldn't want to live that far east of you. Have a profitable tax season.

[Matt Sova]

Snag

Yup, Auburn Hills, Southfield, Birmingham big dollar district. Unfortunately, like you said they need some GOOD CPA's. I'm just a po-dunk CPA from a po-dunk town.