Returning or not after a year away

[erchess]

Solid business decisions

It seems obvious to me that a returning client is worth more than a new client. Therefore it makes sense to me to strongly consider rejecting a client who I have done in the past and then went away. The only possible way it could make sense to take them back would be if I have and they are willing to pay a premium for being new.

LT's point about how you can't fire a client you don't have is well taken and is why as Taxea pointed out there is no need for me to let this bird know I won't be doing him in the future unless and until he asks me to take him back.

[JohnH]

I'm not sure I follow the logic that a returning client is worth more than a new client. (Or less, for that matter). If you bill by the hour you won't care about such things. Billable time is billable time, regardless of whether the client has been with you 10 minutes or 10 years.

You can charge fixed amounts per schedule or form as a general rule to simplify routine preparations, but if your overriding consideration is to adjust the fee for non-routine work based on time expended, you eliminate most of the issues related to the cleint's longevity, repeatablity, reliability, enjoyability, and all the rest.

I agree that there are plenty of reasons to decline to do someone's work based on presumed risk, untruthfulness, and a hos tof other reasons, but nothing having to do with whether they've walked through your door in the past.

[taxxcpa]

No hassles

Generally I would take a client back if they quit because their return became simpler and they did it themselves, then, later, complications required them to need help.

Mostly I try to get rid of clients if they are a PITA and operate a hassle-free tax practice.

[taxea]

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.

with me it isn't ego but rather usually the client that leaves is the problem child that I don't want back. Others I have taken back because they quickly learn the error of their ways.

[dyne]

If a client failes to come back to me I will NOT prepare his subsquent returns. No exceptions.
I do not prepare extensions and I do not prepare tax returns for those who do file extensions.
I do NOT prepare delinquent returns.
One client argued that he was entitled to disability although his 1099-R was coded 7
and his employer TOLD him he was NOT entitled to report this income as disability.
I prepared the return using code 7. When he came to pick up the returns he became
angry that I had not treated this as disability income. It made a differance of only $44
in tax. I tore the returns up and sent him on his way. I do not tolerate these types of
people. The first thing I learned that this is MY business and I must set my own rules
and if clients do not obey my rules and follow the tax law, I get rid of them. The result is
that I have 300 excellent clients.

[newbie]

>>>>One client argued that he was entitled to disability although his 1099-R was coded 7
and his employer TOLD him he was NOT entitled to report this income as disability.
I prepared the return using code 7. When he came to pick up the returns he became
angry that I had not treated this as disability income. It made a differance of only $44
in tax. <<<<<<

What made the $44 difference in the code 7 vs disability?

[Gary2]

>>>>One client argued that he was entitled to disability although his 1099-R was coded 7
and his employer TOLD him he was NOT entitled to report this income as disability.
I prepared the return using code 7. When he came to pick up the returns he became
angry that I had not treated this as disability income. It made a differance of only $44
in tax. <<<<<<

What made the $44 difference in the code 7 vs disability?

Disability from an employer is earned income, other retirement isn't. This can affect the Making Work Pay credit and EITC.

[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?

I send them a "Dear John" letter. If you want a copy emailm me

[JohnH]

Burning bridges is a good strategy if you're fighting a war, but it's never good business practice. Except for the few jerks who won't pay their bills, try to use me as an IRS foil, or are just too much of a PITA to be profitable, I never view my ex-clients as enemies.

[Uncle]

Agree

Burning bridges is a good strategy if you're fighting a war, but it's never good business practice. Except for the few jerks who won't pay their bills, try to use me as an IRS foil, or are just too much of a PITA to be profitable, I never view my ex-clients as enemies.

If I buy bananas at Safeway one week and at Costco the next, Safeway does not ban me for life. Indeed, they seem eager for my business. They appear to have no ego issues. Me, I welcome prior clients. I have many who come to me every second or third year and use someone else in the intervening years. Makes no difference to me. I am in the business of selling my services. You have money and want to buy my services, please get in line.

[Kram BergGold]

My 2 cents

The only reason to contact this client is to avoid having to deal with him a year or two from now. I would write a polite letter stating that by canceling the appoiintment and going elsewhere he has effectibley termininated your professional relationship and you wish him well in the future.

[oceanlovin'ea]

Peoples circumstances change. I know mine have changed greatly in the last few years. Sometimes people feel that they can do it themselves and maybe they can for a year or so. I have had clients that were once schedule C people stop coming to me. The last year they came their business was almost gone, like direct sales or party sales people. So if they just have an EZ now, they may not need me. But if the last time I did their return I treated them nicely and did a good job, I feel they will call me if they need to have their taxes prepared by a professional again.
I have picked up a couple of new clients this summer with amended returns or answering IRS letters. They both said they will just let me do their taxes from now on.
Bottom line is I will do their return again. If they were a really aggravating client, I will make sure I am paid well from now on. As long as you don't ask me to do something illegal or unprofessional, I would take them as clients. My husband just retired.....we need the money.


Linda, EA

[Black Bart]

Everybody to their own taste

I've always been halfway between "throw the bums out" and "come one, come all," but I can't afford to pick and choose nowadays as much as I used to. Attrition's been high for two years due to client retirement/death (have many elders), the lousy economy (much price-shopping), TurboTax (DIY computer jockeys are coming in the windows), climbing filing requirements (low pensions no longer taxed), part-timers doing taxes cheap ($20/30/40) and wrong (their standard: anybody lving in-house --and some across the street-- is "EIC qualified"). Enforcement on this is extremely lax (Snaggletooth once said and was absolutely right that EIC enjoys a "hands-off" political popularity) and their big refund claims sail right through without a ripple while killing my credibility.

Returning mild PITA cases: I used to suffer twice but now quote "make me feel good" prices -- mentally upping it (clickety-click/$200-400-600-800) as we talk and I recall the previous unpleasantry. Not 100%, but it'll do.

Returning extreme PITAs, those I dislike (my ego/theirs), and some I wouldn't take back no matter what. Usually I plead workload but if they push it I'll tell 'em true (your stuff is too much trouble/aggravation). I once quoted an outrageous price (like $800 for a hundred dollar return) and the guy said "Okay," so I dropped that tactic.