Washington Today 4-6/2006

[Chief]

I saw Nina Olsen on television this morning. She did not say much of anything except she quoted the national average of tax return preparation is $150. I will figure my average charge when the season is over but I know it is no where near that.

Did you know she was an unenrolled tax preparer for more than 20 years?

It seems to me that her most important contribution to society is helping individuals deal with the IRS.

[Safire]

I hope every one of my clients saw that and realize what a heck of a deal they are getting with me.

[Matt Sova]

No way

I hope NONE of my clients saw that!!!

[Gretel]

I hope people stop paying any attention to "average". It doesn't mean nothin' anyway.

[Safire]

"I hope NONE of my clients saw that!!!"

you crack me up

[Unregistrd]

Should we collect differnt averages to compare

Should we collect differnt averages to compare, Such as price of gas, loaf of bread, single room apartment, I know the area I live in you can get a 3 bedroom house for less than a TINY 1 room apartment in either New York or California(most areas) of course more people make minium wage of $6.15/$6.50 and couldn't afford that apartment <ouch>

Loaf of Bread "Sam Choice $1.07 Wheat, Wonder $2.00"
Gas 2.549 Unleaded, no Ethanol (Arkansas)
Weekly Rated 1 room Motel converted to Apartment Sleeps 2 with Utils,cable tv(68 Channels) $125 week(cheapest in town) $168 Week Average PayPhone down the street!

[sea-tax]

I would tell my clients that " I am not an average tax preparer therefore I charge an above average fee".

[Gretel]

I would tell my clients that " I am not an average tax preparer therefore I charge an above average fee".

I sure like this argument. If you turn it the other way some of us (including me) would need to increase fees. Otherwise I had to say: I charge fees below average so I must be a below average preparer.

[taxmandan]

I sure like this argument. If you turn it the other way some of us (including me) would need to increase fees. Otherwise I had to say: I charge fees below average so I must be a below average preparer.

That is exactly how many clients view it, if you're fees are low they figure they will be getting substandard results. Many people (including me) will look at the fees as an indicator of value and avoid someone with low fees. If you present your service based on value you will get the value conscious clients and they expect to pay more.

Now the Mal-Wart shoppers, they always want cheap and consider tax preparation a commodity with no interest in value. These are the people that the first question they ask is 'How much is this going to cost?'

So, it depends on the type of client you seek for your business, the national chains and many other tax professionals like the RAL, EITC clients and there's nothing wrong with choosing that market. But, if you want the more complex returns and higher income clients, you don't want to be the low cost leader, it is a negative message to that market.

Daniel

[veritas]

Taxpayer advocate

I read one of her reports. Basically all it said was the IRS should go after the underground cash economy. 1099s for everybody for everything. That really doesn't seem like an advocate (for the taxpayer) to me. She'sbecame a lawyer so she went to the darkside.

[Black Bart]

Olsen &amp; 1099s

On the plus (light) side, they interviewed her on C-Span the other night and one of those 1099s she is pushing for is an expanded 1099-B which includes the cost of the stocks sold in addition to just the sales price. A few brokerages already do it as a courtesy, but she wants to make it mandatory and that certainly would be nice information to have. Lots of times it's a real pain to get the taxpayer to dig it up.

[Unregistered]

I read one of her reports. Basically all it said was the IRS should go after the underground cash economy. 1099s for everybody for everything. That really doesn't seem like an advocate (for the taxpayer) to me. She'sbecame a lawyer so she went to the darkside.

It's being an advocate for those of us that report all of our income.

[jainen]

I tell MY clients

>>I would tell my clients that " I am not an average tax preparer therefore I charge an above average fee".<<

I tell MY clients that "You are not an average client therefore I charge an above average fee."

[Jiggers]

1099B's &amp; Cost

On the plus (light) side, they interviewed her on C-Span the other night and one of those 1099s she is pushing for is an expanded 1099-B which includes the cost of the stocks sold in addition to just the sales price. A few brokerages already do it as a courtesy, but she wants to make it mandatory and that certainly would be nice information to have. Lots of times it's a real pain to get the taxpayer to dig it up.

I charge the taxpayer to "dig it up", don't you?

There is a problem when the client moves his brokerage account from one broker to another. There is no transfer of the cost.

I doubt if all the brokerages would be able to certify that their information is correct. I have my retirement plan in mutual funds at Edward D. Jones. Their reports to me show just the original cost of the investment. They do not show the reinvestments of the dividends. Sure, the report looks good, but when you add in the reinvestments, not so good.

What about inherited stock? Stepped up basis applies.

What about giftted stock? Original basis and which brokerage house has that?

Lots of problems and we will still have to do some "digging up" of the cost basis!

[Black Bart]

Excavation charge

I charge the taxpayer to "dig it up", don't you?

There is a problem when the client moves his brokerage account from one broker to another. There is no transfer of the cost.

I doubt if all the brokerages would be able to certify that their information is correct. I have my retirement plan in mutual funds at Edward D. Jones. Their reports to me show just the original cost of the investment. They do not show the reinvestments of the dividends. Sure, the report looks good, but when you add in the reinvestments, not so good.

What about inherited stock? Stepped up basis applies.

What about giftted stock? Original basis and which brokerage house has that?

Lots of problems and we will still have to do some "digging up" of the cost basis!

Well yeah, I charge them for the digging, but lots of times it's so much trouble that I'd just druther not.

I've trailed a couple of guys from one or two brokers to another and that's not too hard except for the div reinvest.

Inherited and gifted stock: I've got the edge on you there -- that's one advantage to livin' in "pore folks" territory -- nobody's got anything to leave or give away.

The thing I was thinking about mostly was those employee retirement plans wherein the company buys half and the employee buys half of 6/10 of a share or so per week for the employee for the last 15 or 20 years. That's usually the point at which I decide I can live with an "average" cost if he (the taxpayer) can. Funny thing though; I've never met one yet who didn't say (although it may usually be true) "I lost money on that stock."

P.S. I just noticed -- we're beating a "dead" thread again. Where do these things keep popping up from lately?