Billing policy

[erchess]

Historically I have always charged only for the big ticket items of preparation and audit assistance. And when planning involved putting anything in writing I charged for that because of the liability issues involved. But I always said I wanted people to call me when they had questions and I feared that invoices might discourage that. The particular client is entering his own tax data from a return he duly paid me to do and its getting rejected. Until it's accepted he won't get a modification of the terms of his student loans and no promises even then. He does not know from the feedback he is getting whether he is being told "based on your return data you don't qualify for the mod" or "we don't match what you are typing in with what the IRS says". I think the problem is somehow related to the fact that I showed him as a full time resident of Michigan where all his income is earned and where he spends almost all of his time but the mailing address on the return is his parents' home in NC. At the time we filed he did not have a permanent residence in MI but he does now.

I guess I have two questions. How should I bill for this kind of thing going forward, and how can I help him make sure he is getting any modification he is entitled to? Do we need to go on and file change of address forms? By the way I know NC will be wanting a return but he will deal with that when the letter comes.

[taxea]

does it reject if you put "c/" the parents on the return address line?

[FEDUKE404]

Reason for rejection

(Wasn't this identical question posted previously??)

Where exactly is the client "entering his own tax data" ?? One would think that with a properly prepared income tax return (the one you did) the numbers and other information should be an adequate starting point. FWIW, many tax software packages have an option where you can provide an individual with a printout (Version A for "parent" or Version B for "student") showing exactly what information to enter on the specific line(s) of the FAFSA application.

If the application is getting rejected, there should be some reason stated as to why such occurred.

As for the issues related to Michigan or North Carolina.....that combination could lead to all kinds of potential problems. At the very least, issues related to actual residency could be a factor both for eligibility for loans, tuition amounts, and (of course) income tax concerns. Stated differently: The gorilla in the room might not even be "income tax" related.

For your original question as to charges, if you cannot handle this situation with some simple "suggestions" as to how to resolve it, I would certainly consider a reasonable (off-season) hourly charge for the time involved. Of course, for my 2¢ worth, if the problem REALLY is only related to data entry, I'm not quite sure how you could improve over what the client has already tried. . .

I would never charge anything for ONLY a simple IRS change of address form (Form 8822). One piece of paper, one envelope, and a postage stamp will get such to client for signature(s) and mailing. For me, that falls into client services. Now if I have to go through the longer route (attach POA etc) then I might consider a charge. But why mess up an otherwise simple process the client can handle?

FE

[erchess]

my software has a care of line but if I were to use that (I never have with any client) I think I would still have to put in another address and while government correspondence might also go to the parents as desired it would also I believe go to the other address.

I would agree with not charging for the change of address. It's just that this family wants two or more hours of me on the phone with them and they want that on short notice and very much at their convenience.

[JohnH]

Sounds like a client who wants to control your time rather than allow you to control it. So they're a good candidate for a hefty hourly charge, paid in advance via a retainer. Of course, they might also be a good candidate for a response along the lines of "No, I can't help you".

[ATSMAN]

Engagement Letter

I think this situation highlights why we need an engagement letter to define the scope of our work and what and how we bill them.

I have helped clients do the FAFSA application for a small additional charge. They are more than welcome to use their copy of the return to do it themselves, but if they want me to spend 45 minutes with them in my office, they have to pay for my time.