Document Fee - Petty Charge

[S T]

I know this is "petty" or a "PITA" I am what is called a "document keeper", which does assist in future years when those "dreaded CP 2000 notices arrive.

But I have been scanning Brokerage Account Reports by quarter on this one client - Good thing I had them to track some distributions on an IRA and also on the "Investment Account" - as the client information and the actual transactions were not "correlating" Client blames the Broker and Broker blames the client on some distributions. - I do have it in black/white on the Statements.

Do you charge for this - On this client he does provide me with the Quarter Reports on each of the Accounts, , but I have asked for "two years" now for either the Client or the Broker to supply me with "PDF" copy, so I do not have to scan and copy

It is taking me some time to Scan in to my document file so I can save and retrieve if needed.

Just a thought???

Sandy

[taxea]

I think it depends on the reason you are scanning them. Is it for you convenience in records keeping from year to year? I have found that the final summary for the year is usually all I need because it contains the full year of activity. And I have also found that it is necessary to retain them from year to year for FIFO purposes.
For a long time I instructed the client to place each investment account statements into a three ring binder...but I am sure you know how that goes. I would include it into the overall cost of the prep of the return or as an admin cost specific to Sch D. I would tend to have a sliding cost based of the volume of time needed to scan and maintain accurate FIFO for the client.

[S T]

In the OP that I posted, it was necessary for the Quarter reports to track a Distribution that the Client thought he made from an IRA account, and actually received from an Investment Account.

Was a really "good thing" I had the quarterly stmts on both accounts --- as the Client was wrong and had I relied on - I could not have determined the Year End 1099R reporting to be correct - to see if the Brokerage messed up.

Some Brokerage houses are better than others on the Year end Statements, this Brokerage House - I often have to refer to Quarterly Stmts.

So as I am posting - I have now spent almost an hour scanning stmts

PITA

Sandy

[Bees Knees]

Seems to me you are scanning quarterly statements for the sole purpose of verifying the accuracy of the 1099-R and/or 1099-B and/or 1099-DIV, etc.

Unless I would suspect the IRA trustee and/or brokerage firm are messing up the end of year tax statements, I’m not sure why I would ever want to scan in quarterly statements. If it is because the client is claiming something that contradicts the 1099-R or other 1099, I would tell the client he/she needs to do the investigating before I go against what the 1099 says. The client needs to prove the 1099 is wrong. The client's understanding of what took place is not enough for me to report something other than what the 1099 says.

[S T]

Bees thanks for you thoughts, I probably did not post correctly on this, this Taxpayer is a Senior and "so needy" and the Broker handling the IRA accounts and Investment Accounts is less than communicating with me and offers little information or support on the Taxpayer Accounts that he manages.

In this particular situation, Taxpayer thought he had taken a larger distribution from an IRA account, but when reviewing the Qtrly stmts, it was found that he took less, and the other amount equalled to the Checks written out of the Investment Account. Client disagrees - but I could find on the Account Stmts - so that is between the Taxpayer and his "Financial Advisor/Broker" and I am using the 1099 forms that were issued at year end. And the 1099 Forms did match the Account Stmts - so that is all good and hopefully will Match the IRS Computer

In support of my files, I have just found it necessary to keep or document on this client - I was not going "against" any 1099 Reporting unless I found an error, that might have needed a corrected 1099R form/1099B form --- I do know better than that, and what the outcome will be later with the dreaded CP 2000 notices.

The record keeping on this client is becoming more, that is why I was asking if anyone charged an extra fee for document copy/scanning of "extra statements"

This is almost becoming a "CYA" on my part


Sandy

[erchess]

My reaction

Covering your A should be a routine practice as should charging your clients for the time and effort involved. (Note that the activity involved leads to the client having a more complete and accurate tax filing which should be perceived by them as a benefit to them and honestly if it isn't then why do you have them as clients?)

I'm hearing Bees say that he goes with what reporting forms say unless the relevant clients prove with no help from him that the reporting forms are in error. I will do about anything the client wants me to do by way of assembling their information as long as they pay me for my time. I may have to revise this policy if I get so busy I stop looking to grow my business. My statement is not intended as a criticism of anyone else for having a different practice.

To me this illustrates why a simple hourly charge perhaps with a minimum and/or a maximum for any given type of job is the easiest and fairest way to charge. The client who gives me documents in the form most convenient for me takes less time and gets a lower bill. I personally bill straight by the hour in one minute increments with no min or max but I am thinking of having a Min that would be different depending on the kind of return or other service. If in fact I do not institute minimums it will be because Drake Software only has hourly and form charges and if I say for example that the charge for 1120S being on the return is $600 and the hourly charge is $175 then Drake will generate a charge of $1125 for an 1120S on which I spend three hours. I believe that the only way Drake will implement a true minimum is if it is the same for all returns. I still might do that but I would have to use a minimum that was appropriate for the simplest 1040 that I want to take on.

[Bees Knees]

Someone once said you are worth what your job is worth. If you run a business and go clean the toilets, you are only worth what a janitor is worth. If you can hire a janitor to do the job for $20 per hour, then that is what you are worth, if you decide to do it yourself.

If you can do a 1040, Schedule A return in less than an hour and charge the client $150 to $200, that is what you are worth when you spend your time preparing tax returns. It doesn’t take a math genius to figure out which job makes you worth more.

I use to do bookkeeping for clients, but found myself charging less per hour for bookkeeping than for tax preparation. I believed that bookkeeping was not worth as much as tax preparation, so I charged a smaller hourly rate when I was doing the books than when I was preparing the same client’s tax return. As my business progressed, I found that I had enough to do at my top dollar rate doing that than spending time doing lesser jobs. So now, if someone wants me to clean the toilets, I don’t mind as long as they pay me my top dollar.

Usually all it takes is to say, yeah I can do that, but here is what you will save if you do it yourself.

[Lion]

You say you charge an hourly fee, so you answered your own question. If you keep documents, then you charge your hourly fee. If you prepare tax returns, then you charge your hourly fee. If you calm down the client worried about an audit or going through a divorce, then you charge your hourly fee. Whether or not you have time to store his documents, only you know. But, if you do, then you charge him your hourly fee.

[JohnH]

Time for THE song...

http://www.youtube.com/watch?v=5TkuZ5oI9uY

[mactoolsix]

Time for THE song...

http://www.youtube.com/watch?v=5TkuZ5oI9uY

Guess that sums it up!!