Firing clients?

[Possi]

How do YOU fire a client?

I have one who is so irresponsible, I don't trust my tax returns. I just had a prior year return come back because he didn't give me unemployment income. That year, his income was so low, I asked him how he survived on so little. He said he was living on his savings. So, I was suspicious that I didn't have all of his income, but I did what I could.

He balks at paying taxes as if he is the only one, and I really want to let him go. He already gets the PITA differential, but even with that, it's not worth it.

So, how do YOU fire a client?

[mastertaxguy]

Firing a client?

1. Best to document this.
2. If you don't want a confrontation in the office, MAIL (certified or priority mail with delivery confirmation) letter to client with any current year documents for a return (or returns) which are not completed including client supplied worksheets, documents, etc. (but not your own worksheets, notes, etc.).
3. Letter could state that after reviewing the client's matter you have determined it is best for then client to retain another tax professional. Advise that you will keep items you are required to keep per IRS regulations (and any applicable state rules) for the length of time specified.
4. Keep your records and delivery receipts.
5. When/if the tp/ex-client calls, tell them the letter is all you can say and wish him/her/them well.
6. IF there is a balance due, send a bill but don't hold your breath.
7. If your engagement letter doesn't have a provision giving you the option to terminate services, add it.
8. Advise you will provide copies of prior years' returns and documents for specified fee payable at time of delivery.
9. Move on.

[Lion]

You can also raise their fee again, substantially, in writing, now, in hopes they will go elsewhere.

As has been mentioned, if you fire them, make it short and sweet. No details. Like point 3. above. Or, you are no longer preparing their type of return.

[MAMalody]

IMO the trick in firing a client is to get him to quit on his own. This is easiest done by doubling (or add whatever percentage you choose) his fee every year until he gets the idea. If you do have trouble getting paid, I would ask for a retainer up front (say 50% of the doubled fee). I would not send him a reminder to schedule an appointment note or anything else you do for your clients to get them set up for the next year. He may simply remember when it is the middle of tax season and you can simply tell him that because of the time of year his is bring in his information, you will not be able to do his taxes and suggest he contact another professional to see if they have time available.

[Possi]

Thanks

Thanks for the input.

Since I have raised his fee via the PITA Differential, I will send him a letter. I'm still sitting on the 2013 tax return that has been ready to file since March. He is only getting a few bucks back in withholding, and he is in no hurry to wrap this up. If he doesn't take care of this before the e-file deadline, I'm going to follow your advise, and send his paperwork back to him with a short, sweet note!

[BHoffman]

I have come to the conclusion that some people are pretty passive/aggressive about taxes. They cannot take out their frustrations on the IRS, so they punish their tax preparer. They know when we're starting to panic, and we sometimes do panic - because we don't want to see them get stuck with big penalties, because we care, because we want to help them. It's these types of client who need to get fired. There isn't enough money in fees (realistically) to compensate for that kind of aggravation.

Love this from the movie "Jerry McGuire": Help Me Help YOU

http://www.youtube.com/watch?v=AGt5f70K02Q

[Roberts]

You can also raise their fee again, substantially, in writing, now, in hopes they will go elsewhere.

As has been mentioned, if you fire them, make it short and sweet. No details. Like point 3. above. Or, you are no longer preparing their type of return.

This is what I'd do. Mail them a letter outlining that with their increased time requirement, you'll be increasing the fee charged to a level you are fine still working with them.

If they were paying $200 before (as an example), how much would it take for you to agree to do their return again? $400? Inform them this will be the new figure and if they return you are happy. If they don't you are also happy.

[mastertaxguy]

Firing Clients: don't beat around the bush.

This is what I'd do. Mail them a letter outlining that with their increased time requirement, you'll be increasing the fee charged to a level you are fine still working with them.

If they were paying $200 before (as an example), how much would it take for you to agree to do their return again? $400? Inform them this will be the new figure and if they return you are happy. If they don't you are also happy.

Why beat around the bush?

If you don't want them, break up. What is the problem with simply telling the taxpayer you are no longer going to assist them with their taxes and they need to find someone else?

Just document everything you do. Remind them you can provide copies of prior year returns if needed for your standard copy charge (at least $30.00).

[Burke]

I agree. I doubled a client's fee one year from $250 to $500 and she still kept coming back. You just need to say "No" sometimes. Just "reducing your clientele to a more manageable level" is sufficient (and that can be taken two ways.)

[JohnH]

A couple of suggestions on what to say in a letter to the client:

1) In reviewing my work load and my clients' needs, I've decided that I cannot continue to prepare your returns.

2) Don't know how we could get along in this office without your business, but beginning tomorrow we are going to find out.

Choose one.
I'm fine with either.

[JohnH]

Bingo!
Five thumbs up on this one.

[Roberts]

Why beat around the bush?

IMO, there is always a price I'm willing to work for to put up with a little crap.
I do the 1040's of 10 of the world's biggest jerks for $10k per return.

[JoshinNC]

You must not have met some of these jerks

IMO, there is always a price I'm willing to work for to put up with a little crap.
I do the 1040's of 10 of the world's biggest jerks for $10k per return.

I have returns that I charge more than $10k to do and I wouldn't do them for less than that.

:0)

[Possi]

Perfect!

Wow, yes! That was perfect!! LOL
They just don't get it!
FIRED!

[Possi]

Door number 2!

A couple of suggestions on what to say in a letter to the client:

1) In reviewing my work load and my clients' needs, I've decided that I cannot continue to prepare your returns.

2) Don't know how we could get along in this office without your business, but beginning tomorrow we are going to find out.

Choose one.
I'm fine with either.

I choose 2!

So funny!!