Returning or not after a year away

[erchess]

I almost posted this to the thread started by Jiggers "Clients! and Non Clients!" and maybe that would have been ok. Anyway, here goes.

I had a client call me, I think on Monday. He pointed out correctly that I did his return in 08 and he didn't comment on what he did for 09 but I do know that he had to have had a filing requirement. The earliest I could see him was this Friday and he seemed happy with that. Then today (Wed) he called to cancel saying he found someone to do it today.

I know that some of you would not have made the appointment in the first place because if someone leaves you they cannot come back. I have decided that I will fire this particular client but I'd like advice on how to do it. If you fire a client do you tell them when you reach the decision or only when they call to ask for help? If you have told them they are fired how do you make sure that you won't forget them and accidentally take them back a year or two down the road?

[ChEAr$]

I have no such policy of refusing to welcome a former client back into the fold unless I can recall a specific unfavorable circumstance relating to his not returning.

after all, clients make mistakes and thing they can get it cheaper elsewhere, or maybe girlfriend persuades them to try her preparer, or they buy a business and part of the deal is that they keep that same accountant.

Moral of the story; remain flexible and like James Bond, never say never.

[BP.]

Returning clients- major trend this season.

[JohnH]

I have never understood why anyone would have a policy of refusing to take back former clients. Each situation is unique, so why bother to have a policy in the first place? Sometimes having inflexible policies just locks you into a destructive behavior - I think it's much better to scrap most policies and operate according to common sense and good business practice.

I'm not sure why you're concerned about it in this situation - sounds like the client has already fired himself for this year anyhow. But if this were my client, if he called again next year after a (now) 2-year hiatus, I'd consider doing his work in the same manner I'd consider doing the work for any new client - at current rates and with the appropriate review of prior year's returns. Now that I think about it, I guess that is a policy - for me.

[taxmandan]

I try to remain flexible also. Had a client who would show up some years and not others, never had all her paperwork, sometimes what she had I held for months, then would show up with the rest. A real PITA. But I put up with it only to have her disappear 3 years ago for good. Then, her son calls for an appointment and I thought oh no, but he has become a steady reliable client with a S Corp. and very diligent about doing things right. And she referred him to me. You just never know what opportunity you might miss if you get tough with someone who doesn't always tow-the-line on being the perfect client.

[erchess]

Reason to fire

The reason to fire this client is that he apparently believes that speed of service is more important than whatever difference there may be in qualifications and level of personal service between me and someone else. I seek clients who know that there are vast differences in skill and training between different tax professionals and are prepared to pay extra for extra skill and training and to wait patiently until I have the time to do their return. I did take the guy back for this year and I would not have minded if he had wanted to cancel Friday and see me some time down the road. But he canceled Friday to go with someone who was willing to see him sooner than I was and I guess that is sticking in my craw.

Also, my memory is hazy but his 08 return clearly shows a rented trailer and land with real estate taxes as the only expense. I think I remember him telling me he was not depreciating it and me telling him that when he went to sell it he would have to subtract from his basis the depreciation he could have claimed and him telling me he did plan to sell it in 09. I also think he told me after the return was prepared and efiled that he has a Federal gun dealer's license and occasionally sells a gun to someone without reporting the income to the taxing agencies and without (per him quite legally) reporting the fact of the sale to anyone. I told him that going forward that we would have to report that income.

The more I think about this the more I think his memories of these conversations came back to him even before they came back to me so I most likely will not hear from him again unless he has correspondence from the government that scares him to the point he chooses to come clean.

[geekgirldany]

I have two clients that come to me every two to three years. Just before the time limit on getting refunds back. One I had actually put his folder in the pile to be stored away... then here he comes this week.

I am pretty flexible on taking people back but if I had a client that did what you spoke of I would not take them back or even return their phone call the following year. I had one cancel today, new client, said his wife wanted the tax returns completed today so they went somewhere else. Whatever... good luck to you.

[DaveO]

I deal with the PITA clients by raising their fee to the point I can tolerate them. I'll take a client back if they left on good terms. I know some who Turbo Tax when they don't have stock sales and come to me when they do. Some I see every 2 or 3 years and do several at once.

[taxea]

I almost posted this to the thread started by Jiggers "Clients! and Non Clients!" and maybe that would have been ok. Anyway, here goes.

I had a client call me, I think on Monday. He pointed out correctly that I did his return in 08 and he didn't comment on what he did for 09 but I do know that he had to have had a filing requirement. The earliest I could see him was this Friday and he seemed happy with that. Then today (Wed) he called to cancel saying he found someone to do it today.

I know that some of you would not have made the appointment in the first place because if someone leaves you they cannot come back. I have decided that I will fire this particular client but I'd like advice on how to do it. If you fire a client do you tell them when you reach the decision or only when they call to ask for help? If you have told them they are fired how do you make sure that you won't forget them and accidentally take them back a year or two down the road?

You don't need to do anything other than say "I'm sorry but since you have been gone for the past two years, I have taken on other clients. I agreed to fit you in last year but, will not be able to take you back as a client this time."

[JohnH]

When I see posts that talk about "taking clients back" or "not taking them back" based on anything other than solid business decisions, I begin to wonder how much of the discussion is based on ego. After all, what difference does it make if someone rejects my services one year and desires them the next, for whatever reasons they may have?

Then I remember that my objective at the office is to run a profitable business. I get my emotional needs met at home. That helps me make the right decision almost every time.

[S T]

Might be an issue

As we prepare a t/p return, most all of us request a copy of the prior years return, one to check for defaults, other reasons would be depreciation, carry overs etc. a lot of pertinent information can be derived from the prior year return.

If the t/p had been one of my clients, then left for the subsequent year, I do not have that information in the client file or tax return, so it is like starting with a "fresh client" and building the client portfolio all over again, can I charge for that? not much I would think.

While I would welcome some clients back, if I lost them for a year or two, it is difficult to rebuild the portfolio, so that I know for due diligence that I have all of the pertinent information.

Not so inclined

Here is an example that I have from 2009 - the t/p has 5 rental units, I was tracking mortgage interest allocations as he was over limit and mixed use, he had a cancellation of debt that was questionable possible amount could be subject to tax , due to recourse loans - this t/p chose to either have his return completed by someone else or prepared on Turbo Tax due to the 1099C issue. I had way too much information in my file on the tracking of the loans, and the t/p did not want to hear it.

Do I want to rebuild my client file for 2009 for depreciation, passive losses, and if I look at 2009 and point out errors - as pointed out in another thread for Circ 230 and take this client back for 2010. The client is begging me, and I am stating to him I don't know - and simply told him that he insulted my professional knowledge and integrity.

I had two other clients for 2010 - that decided to prepare their returns on Turbo Tax - will they return in 2011 or 2012 I don't know - Will I take them back in 2011 or 2012 I don't know that either. Will there be issues with those returns they filed themselves, most likely, but no one will know for approx 18 months, when IRS or State issues those notices. One of the clients has already had a "taste" of the dreaded notices, but that did not stop them from completing their own return on Turbo Tax. FYI - I achieved a "no change" but alas how soon the t/p forgets.

I reserve judgement on taking back a client when they have left or questionned my profesiional ability and my fees. It would certainly be on a case by case basis and a clear understanding.

My two cents worth

Sandy

[ToledoEd]

I have a large client base and it is not unusual to have some clients leave for a year or two and then come back. I have a few clients who disapear for a few years and then bring me 3 to 5 years worth of returns to do. One client has twice had me prepare 5 years of returns at a time. He knows that he is paying me extra for those older returns, because I charge extra to prepare prior year returns. And he also knows that he has lost some refunds because he did not file withhin 3 years.

I don't think that I have ever fired a client in 25 years, although I have knowingly ticked a few off enough that I thought they would not return. I did not hear from 2 brothers of that type for 4years when they both called me and had me do all 4 years of missing returns.

If I had a ethical or legal question I would turn a client down, but mostly I try to help anyone who comes in. Having a client who you have told that they are doing something wrong come back and tell you that you are right is satisfying in a slightly evil kind of way.

[S T]

More

Ed, from my prior post I did not address the issue of a t/p or client missing in action for 2-4 years or more - Yes, those clients I would welcome back, just that it certainly would be after 4/15 and of course the applicable fees would be charged. I have a couple of those that I am "nursing" through the process.

I have to say I welcomed my move - as there were a couple of clients that I could "ease out " gently due to relocation - as I was just plain tired of them - or I just did not like preparing their returns. Nothing you could put your finger on - but just that "deep down stomach wrenching" every year!

I would think we would all take the client's returning to us on a case by case basis and what we feel comfortable with.

A lot of good insight on this post!

Sandy

[erchess]

Reflections

I clearly do have ego pain from the fact that a former client left me and worse ego pain from the fact he after a year away asked to come back, was met with open arms, and then changed his mind. I'm not sure I really believe anyone could experience what I experienced without feeling similar to the way I feel, more or less intensely perhaps. That said, it's good to remember that I want to make a profit doing tax returns so I should think twice before I turn down someone who wants me to prepare one for my normal fee unless there is some unusual situation that makes me think the return could come back to bite me or unless between work and the rest of life I am too busy.

That said, I am remembering things that make this particular return likely to bite me. I won't be doing him again and ty Taxea for the advice on how to handle the situation.

One idea I have picked up on in this thread is the idea of charging more for the fact that a new client is more time consuming to handle than the same person would be if I had prepared their last two or more returns. That is not currently built into my fee structure so I need to change my fee structure. I currently charge by the form and in some cases by the line entry or the section of a form. If I charged strictly by time or perhaps a minimum fee for each base form and on top of that a time charge then it would be automatic. Or if I decide I am wedded to the forms charge I could build in a charge for reviewing prior year returns not done by me and possibly others such as for setting up depreciation for an asset not currently in my computer, whether newly placed in service or merely belonging to a new client.

Anyway ty to all who posted and to any who post after this.

[thomtax]

When I see posts that talk about "taking clients back" or "not taking them back" based on anything other than solid business decisions, I begin to wonder how much of the discussion is based on ego. After all, what difference does it make if someone rejects my services one year and desires them the next, for whatever reasons they may have?

Then I remember that my objective at the office is to run a profitable business. I get my emotional needs met at home. That helps me make the right decision almost every time.

Very well said and my feelings exactly.

I guess the one big question that comes to my mind is how can you "fire" a client that you don't have in the first place. If that were the case, I could fire a large percentage of my home town since they go somewhere else.

LT