OT: Late Penalty... My Fault

[geekgirldany]

This is just something I need to get off my chest.

Corporation returns, I send clients reminders throughout the summer to bring me their info to finish the return. Telling them the due date and the penalty if late. Others I have the return nearly finished but lacking info. This past week, I was begging them to bring by what I lacked. Phone calls and emails. I finally got some information today from one with "let me know when to pick it up today". Another sent her info on Thursday, I was working on other returns, warned her that I would possibly not have it finished today. Started working on it Saturday... several items come up that I have to research before finishing. Plus people coming by all day to pickup their returns.

What I got was "I was expecting it to be finished. That penalty will really hurt my business. I talked to you about the other situation last year, you said that you would take care of it". I explained that I did not remember it, but if I did say I would take care of it, I meant when I was preparing the return which includes research. She said it was a simple return that I should've had finished.

People just do not understand the time it takes to prepare tax returns. This client said she thought it was just taking the numbers from the P&L and inputting into my tax program. I told her it is more complicated than that. I am getting blamed for their own lack of planning. I really feel like I should not work myself to death just to get an return finished that should have been brought by a month ago.

This is the worse year I've had for corporate and personal extensions.

[Roland Slugg]

Why is it your fault? And why are you begging?

If I had a client who wasn't furnishing me information I needed to prepare a complete and accurate return, I write a letter ... NOT an e-mail ... explaining that I can not complete the return, and that unless all necessary information is furnished or made available to me by (date), I will be unable to complete the return by its filing deadline. I would then explain what penalties and interest will be imposed.

For the date, I would probably specify a date at least ten days before the filing deadline ... perhaps more or a little less, depending on the complexity of the return, the time required for mailing or delivery, and my own work schedule. It would then be up to the client to respond ... or not ... his choice.

I would not absorb any late filing or payment penalties, and I would not waive any fee accrued to date if the client decided to take the return elsewhere.

[geekgirldany]

Feel like after talking to a few today they are putting the fault on me. I know it isn't but still it is aggravating.

You know, I ask for information... they wait a few weeks... send some... then send some more later.

Next year I will start sending letters to clients plus emails and phone calls. I told the client today to get it to me two weeks before the due date next year.

Roland, it has just been one of those days.

[Roland Slugg]

Next year I will start sending letters to clients plus emails and phone calls.

I would not make make these kinds of final advisories and requests via e-mail or by phone. Neither would have the impact or be taken as seriously as a well-written letter sent via snail mail.

[TaxGuyBill]

I completely agree with Roland. There is absolutely nothing that is your fault. I especially have absolutely NO regret for a late return if the client decides he wants to procrastinate for over 8 months.


Ideally, have each client sign an engagement letter indicating that ALL material needs to be in your hands by a certain date. Personally, I recommend moving the deadline to a week earlier than your 'real' deadline, knowing that clients still won't have it on time.

In my small business, my goal is to do NO work on April 15th, September 15th, and October 15th.

[S T]

Dany, I so sympathize with you, as I have also been caught up in these "messes" - I was down to my last 4 --- 1120S and 1065 forms this last week. Most clients responded, already knowing they were on extension since last March and April 2014 - just trying to get the info.

I managed to have all completed, except one by 9/14 late and efiled, thank goodness, as I really did not believe one would clear efile!

One client that I have been notifying, by phone, email and mail requesting information for a 1065 form, and NOTHING! This client already has received penalties for late filings and is at ACS. So they receive one more notice for 2013 filings - as I HAVE NO INFO! to file on.

My take, if my fault, I will work out the interest, maybe penalties, and/or no charge for notices to figure an abatement,

Otherwise, NO GO, I am not participating in the lack of cooperation from the client.

Be strong!

Sandy

[geekgirldany]

Thank you all for posting.

Sandy, it sounds like you were in the same position I was. Working to the very last minute on getting these finished. I just got one more filed... told them if they would get it to me by midnight I would file. They did.

You would think that after adding that penalty some years ago that people would be quicker to file their corporate returns. There are some that will still just wait. I don't understand it.
I guess they want to put the blame on someone other than themselves.

Whew, well individual extensions coming up soon... hopefully sooner than later on these.

[JohnH]

Dany: these clients are taking advantage of your good nature. If you allow them to run your business to suit their purposes, they will continue to try and make you responsible for their procrastination. when someone gets their info to me too late to complete their work, even if before the due date, I tell them they will owe penalties. if they can't live with that, they need to find someone else who wants to be a hero and work all night. Sure they will complain and tell me how easy their work is, but my position doesn't change.

They know what they are doing, and it's important to insure they understand at the outset that the penalty is simply a cost of doing business on their terms. But if you let them, some self-absorbed types will try to bully you into paying for their inconsiderate behavior. Don't fall for it.

[mactoolsix]

We always set the deadline for receiving information on the first - April 1st, Sept 1st and Oct 1st.

Get us everything by then and we will do our best to get it done by the deadline, saving for some items that just take excessive time for more research - we usually try to notify well in advance.

Information received after the first, could very well be a late return (or April 15 - extension).

Of course that is in our client contract, and many ignore it. We work hard and late just like everyone else, but when the information was late (after the first) and it is completed on time we don't hesitate an extra charge of 10% to 25% (also in the client contract).

[S T]

Dany ----

JohnH and MacTool are exactly correct in their statements, and I am revisiting my "delinquent" blame everyone else clients.

I have one for this year - and 9/15/2014 extension has come and now passed by - and they never sent the info and as the same pattern continues, there is another notice "lurking" along with the past notices.

We can only do what we can do, and we do need the Client cooperation. So please do not buy into the Clients guilt trip! It has taken me forever to get over that one!

Yes on to the 10/15 extensions now and I have put everyone of those on notice this week with deadlines!

I am tired of the "client excuses"!

Take Care

Sandy

[Jiggers]

You don't have the following sign over your desk?

"BAD PLANNING ON YOUR PART DOES NOT CREATE AN EMERGENCY ON MY PART!"

Our clients think they are our only client, don't they?

Another sign I have over my desk is:

"I DO NOT CHARGE FOR THE TIME THAT IT TAKES TO DO THE RETURN, I CHARGE FOR THE 44 YEARS OF EDUCATION AND EXPERIENCE!"

[JohnH]

I thinking about this thread, I remembered an incident several years ago where a new client came to me with partial information. We filed an extension and then I didn't hear form him for months. After a half-dozen phone calls asking him to bring me the rest of his info, he called me about a week before the deadline to say he was "getting everything together". I told him he probably didn't need to rush, because I probably wouldn't be able to get he return finished by the deadline.

He called the next day to say he was bringing it in within an hour. When I repeated my previous statement, he said "If I get it to you today, you'll have to finish the return or else you'll pay the penalty". Seeing red, I thought about that for about 15 seconds and then told him not to bother coming in, because I wouldn't ACCEPT his information. He was completely taken aback, and he sputtered a bit about how he didn't "understand". (That was a lie - he understood exactly what was happening). I explained to him that after his previous comment I wanted to be crystal clear about who was responsible for the late filing. I told him I didn't take kindly to people trying to stick me with the penalties they had earned by their negligence.

All that is to say that some people will push you to the limit.
You'd better push back, or else they will get into your head and they will own your time.

[mastertaxguy]

Late filers....

One could always close their office completely, or early. on April 15 (or whatever the non-extension due date is), and September 15 and October 15, advising affected clients of that with your pre-season letters (if any) and at the time of extensions (if any). If the taxpayer are that much of a pain, let them go.

I happen to charge for doing an extension: when they balk, I figure I won as they go to perhaps one of you reading this, Block or whomever. When they pay, I win again and no, I don't subtract that from my fee (which by the way I increase on May 1 of each year). I never accept a current return as a drop off or mail in the last three weeks of the filing season or the last 3 weeks prior to the applicable extension due date, but that is just me.

[geekgirldany]

Thank you all for your posts. I decided to take the day off to rest for awhile.

I don't have one of those signs on my wall... I printed out a little cartoon on from the internet that says the same thing. I suppose I will have to get a bigger sign

I agree I go out of my way for some clients. Starting next year I will be sending out snail mail letters to those that file extensions giving them the final drop off date. If it is not received I will not have it completed.

John, on your post, my client that was late threw a little insult my way saying that she better get the individual to me, she did not want another penalty. I took it as a sling towards me. I told her "get it to me this week and you will not". I think she will be getting a farewell letter at the end of the year.

I understand that they feel like that they are your only client.... but sure does seem like they don't get reality that you have other clients.

Setting hard deadlines is what I will have to do.

[Snaggletooth]

Oblivious is the posture

Dany, you are wonderfully mild-mannered and longsuffering. I think this is wonderful.

You're also a pushover for these people. They should be as honored to be your client as you are to be their preparer. Your mild-mannered nature has allowed them to take the offensive and they really need to stand up and take notice that THEY are ones causing the problem, not you.

Try speaking to them eye-to-eye and speak the truth. You don't have to stoop to their insulting level, but you can paint the picture for them and leave them zero wiggle room to blame anyone but themselves. If you lose a couple of these, all you have lost is a couple headaches. Most people will admire your forthrightness and respond favorably to it.