(Vent)What to charge.........

[JohnH]

Got this email today from a client...

"I hope your charges aren't going up much more. I'll have to find someone else!"

I charge $130 for personal and $180 for a Small S-Corp (charge because it is a small biz that does not have many expenses). Maybe I need to explain that I charge $600 for other S-corp clients.

I have a couple of really small S-corps that I discount significantly from my standard fee. After seeing a post on this forum a couple of years back suggesting this, I started listing the standard fee and then showing the discount. That helps in a couple of ways:
1) calls out to the client they are getting a sizable discount
2) leaves the door open to adjust upward if circumstances call for it - maybe all the way up the maximum if you need to do so.

Sounds like your client may need a reality check...

[BHoffman]

Yep. Always easier to discount less than to raise fees.

[Lion]

S-Corp

They incorporated a few years ago. Client wanted Inc. after his name, and lawyer said to be an S-corp. (I was suggesting a C-corp as they have huge health care premiums.) First S-corp return was bounced back by the IRS. Lawyer said the tax preparer should've filed Form 2553. I invoked one of the late filing procedures.

Older LLC/partnership still exists with zero activity each year since client thinks he wants to purchase real estate and lawyer told him to keep the LLC to own real estate. At a minimum of $270/year to CT plus my tax prep fee -- but the lawyer charges more than I do so he must know more, right?!

Now, I have to explain to him why his invoice is higher this year since I didn't do all his bookkeeping for 2010...

[geekgirldany]

Person that sent me that email actually apologized after I sent them a email to go and compare prices. Client said "I was only joking... I am just broke". Somehow I feel it was not a joke.

Got another one the other day. A drop off. On the envelope it said "call with any questions... and your charges". Should I call before or after I prepare the return? Another one that complained last year about a $10 increase.

[geekgirldany]

-- but the lawyer charges more than I do so he must know more, right?!

Now, I have to explain to him why his invoice is higher this year since I didn't do all his bookkeeping for 2010...

I have new client that had "someone that use to work at the IRS" prepare their return for 2009. I found numerous errors. When pointing them out I got "well she worked for the IRS I guess she knew what she was doing". I informed them that it was still wrong. I explained I am a EA. They just looked at me like deer caught in headlights. Nothing but blank stares. Oh the person that prepared the return did not sign it and it was prepared through a online tax service.

I also like the ones that take on the bookkeeping themselves or have someone else do it. Then they are surprised by the bill you present to them. "It was the same as last year".

Boy I am grumpy today

[joanmcq]

Maybe they used to work at the IRS in the mailroom.....

[taxxcpa]

Used to work for IRS

One former IRS preparer who, back when there were no tax programs, used to put all kinds of comments on tax returns--after someone's occupation he would add "ill health" on the theory that the IRS would not audit you if you were not healthy.

After a car he was listiing for depreciation he would add "bad shape" which would obviously keep the IRS from questioning the repairs he deducted. On Schedule C he always listed "Contributions through business" which he thought made them a business expense rather than a Schedule A item.

Instead of filling out Schedule C he would list everything on a worksheet and show "Schedule attached" and only list the gross sales and the total from the worksheet.

He also did returns in pencil, placed the label the IRS provided on the return, then xeroxed the return and sent in the xerox copy which defeated the IRS goal of scanning the label.

[geekgirldany]

Well update on the "IRS person prepared my taxes" client. They want their tax info back because they are owing. Big surprise. Well actually they wanted the return to mail in. Told them I could only do efile. Then it went to we just want our paperwork back. I just told them no charge to pick it up and go to someone else.

Phone call today:
"I went to Block last year, how long have you been in business?"
Told them how long.
"Will I have any trouble coming to you?"
I just laughed and said I would think not. Guy sounded like he was in the mafia.

[JohnH]

"Will I have any trouble coming to you?"

ANSWER--> "Not if you have a good GPS".

[AZ-Tax]

Will I have any trouble coming to you?"

Excuse me but shouldnt that be the question the tax preparer should ask the prospect?

[JohnH]

Not necessarily. But it's a good idea for the tax preparer to remember the old lawyer's rule -> If it becomes clear that SOMEONE has to go to jail, just be sure it's the client.

[geekgirldany]

Yeah isn't that the truth. He has a business.... so I will see what will be in store for me. I am expecting maybe unallowed deductions and/or crazy high mileage. That when I ask for receipts and logbooks will send him back around the Block.

[Roberts]

That reminds me of the client I had about 7 years ago. He walks in and is about to inherit a mid-7 figure estate and hasn't filed his taxes in many years. We agree to start 7 years prior and work our way forward. All he has is a box of receipts that he SWEARS is a business. We both agree that I will generate a full accounting of it for my fee depending on how many hours it takes, he's fine with it.

After an hour I call to tell him "all I'm seeing are personal expenses for DirectTV, utilities and entertainment receipts), he swears there are real expenses and income. At the end I inform him he's owing about $2,000 in back taxes for a 401-k distribution he took and there wasn't a business in the the box. When I hand him the bill for $1,200 he freaks - never did file that return I'm sure and we didn't do any other returns.

Always wondered what the IRS letter looked like when his name showed up on all those 1099's after receiving his inheritance.