How would you respond?

[kamckinley]

So a previous client emailed me this evening, and I'm wondering how to respond. Also cooling my heals so I don't send a nasty email that I'll regret later.

A little background... this client has not paid me for the last project I did for him and has not responded to my last few emails. He paid his 2014 tax return prep fee, but he has not paid me for an amended tax return I prepared for him in mid-2015. FYI, the amendment was due to a state tax law change and netted him a refund of over $1,000. Not sure why he fell off the grid, but he has been a PIA client for several years (always late getting his stuff to me, late to appointments, complaining about the fee, etc.), so I was ready to just let this one go.

Anyway, so today he emails me that while preparing his 2015 taxes, he thinks he found an error on his 2014 tax return. I checked and there is not an error, he just doesn't understand how/where the transaction is reported on his tax return.

How would you respond to someone who hasn't paid your last invoice, didn't answer your last three emails and who has admitted he is preparing his own taxes this year? For that matter, would you even respond? I'm sure I will, but I would love to hear how you guys would handle this situation.

Thanks!

[JohnH]

I'd probably just email him a copy of the unpaid invoice and an aging report without comment each time he contacted me.

[David1980]

I treat follow up requests on a return I prepared as covered by the original fee unless it's more than simply a question on something on the return. For not understanding where on the return something was reported I'd probably tell them. "That was reported on form / schedule 1234 line X" wouldn't be something I charged a subsequent fee for. On the other hand if their return got audited and they needed representation for an in-person audit I'd charge for that.

[taxea]

I would tell him I need a retainer in the amount of the past bills in order to review the return.

[kathyc2]

I'm a little confused on the amendment. If due to a change of law and missed on original return I would not have charged for amendment.

I would send an e-mail to explain briefly where the item is correct on 2014 return mainly to help prevent him from telling people that you messed up. IMO a couple minutes to respond is a valuable hedge against bad publicity.

[TAXNJ]

If understood

If understood your scenario,

If you prepared and received payment then you are a paid preparer.

Don't know if email is the best way to communicate. Have client send letter of position challenged and respond appropriately with code section for return you received payment.

If not paid, then give client their file back if you still have them.

Send bill if past services not paid along with copy of engagement letter client signed.

If you accept any new work from client and encounter past problems (you mentioned) with the new work then you may deserve the aggravation of such a client based on you post.

Lastly. Good luck

[kamckinley]

I'm a little confused on the amendment. If due to a change of law and missed on original return I would not have charged for amendment.

This was a NEW tax law change that was retroactive, so residents of Kansas who would benefit could amend last three years and get a refund - he was one of the dozen or so I had that benefitted from this law change. So not a mistake on my part, the amendment helped him to the tune of $1,000+ That's why I was so surprised that he hasn't paid the bill.

But that wasn't relevant to the question he posed yesterday. I should have left that tidbit out... sorry for the confusion.

[kamckinley]

Thank you for all the responses. I have cooled my heals and plan on a very quick response explaining that there is no error on the return and where/how the item he is asking about is reported. Will follow up with another request to pay his past due bill and have no plans on working with this person again. In fact, I have a couple of clients like him that I plan on referring out to others after this tax season. Some people just add too much stress to my life/business and aren't worth the fees (even if I add a PIA charge!).

Thanks again for all the suggestions, I appreciate your help with this one!

[kamckinley]

So I very politely answered his question and he came back with more questions. I think he's trying to piss me off.

I'm going to respond that I will be happy to answer his questions AFTER the 2015 tax season has ended, and I'm back from my vacation.

People really suck sometimes

[Lion]

Tell him that TurboTax offers training in using their software. That you use professional software and cannot help him with data entry problems with TT. He can start with Pub. 17 for his tax law questions. Suggest he look for a course to take after April in his local community college or from HRB or online. And, that he should file an extension if he needs to research before preparing his return.

Resend that invoice!

Do NOT help him anymore. Remember that if we prepare/consult on substantially all of a return, we should sign it and are responsible for it anyway. You know he'll throw you under the bus. After all, he hasn't paid you so doesn't value your professional work as much as his own.

Tell him your license it too important to risk by responding to isolated questions without seeing his documentation, and your consulting fee is $250 per hour. Would you like me to take your credit card information over the telephone or wait until your check clears?

[JohnH]

The jerk is raising phony questions as a lame excuse for not paying his bill.
Classic deadbeat behavior.

There are at least two siuutuations in which you can learn a lot about a person's character (or lack thereof):

1) Watch how one treats people who have no power or control over him;

2) Watch how one reacts when he thinks he has some sort of temporary advantage over the other person, especially in the case of a perceived or actual mistake on behalf of the other person.

[TAXNJ]

You deserve

1- did you get paid in full? If not why not?

2 - why are you going to answer "more" questions after tax season when in your first post you were done with the client

3 - As mentioned prior, going back to the past situation, you get what you deserve the same aggravation and more reply posts telling you again for your diary.

4 - read your original post

[kamckinley]

Thanks to everyone for your input. I shouldn't have responded on a Sunday, but I wanted to end this drama because I was letting it get to me. It's been an emotional year due to family health issues, so I have let several of my PIA clients get to me this year.

Anyway, my response was courteous. I reminded him that he had not paid his last invoice, that it was the end of tax season and that I didn't consider him a client at this point. He responded with an apology for not paying the invoice, saying that a check would be in the mail asap.

From his emails, it sounded like he was preparing his taxes himself, turns out he was getting them ready to drop off to me! However, I told him that I will not be preparing his taxes this year. As someone said, if I continue to work with him then I deserve what I get. I had planned on letting this client go before the drama of this year so I'm sticking to my guns.

Thank you again for letting me rant and for your support!

[TAXNJ]

Best to you

Thanks to everyone for your input. I shouldn't have responded on a Sunday, but I wanted to end this drama because I was letting it get to me. It's been an emotional year due to family health issues, so I have let several of my PIA clients get to me this year.

Anyway, my response was courteous. I reminded him that he had not paid his last invoice, that it was the end of tax season and that I didn't consider him a client at this point. He responded with an apology for not paying the invoice, saying that a check would be in the mail asap.

From his emails, it sounded like he was preparing his taxes himself, turns out he was getting them ready to drop off to me! However, I told him that I will not be preparing his taxes this year. As someone said, if I continue to work with him then I deserve what I get. I had planned on letting this client go before the drama of this year so I'm sticking to my guns.

Thank you again for letting me rant and for your support!

All the best to you. As you say there are more important issues than aggravation.

[AZ-Tax]

Supplement your tax practice income

I mentioned this on this board before. I supplement my income as an insurance agent and Reg Rep this way I can say goodbye to PIA clients. Next, I would have not mailed the amended return w/o getting paid first then I probably wait for check to clear since I only accept checks and cash. This year I will release 2 clients but one has insurance thru me so it going to be tough. When you have you own tax practice, its a number game. I have clients for which I prepare their tax returns, have both their auto/home Ins and investments all the way down to the less total income clients who I just prepare their tax return and if I see no potential after a couple year PLUS they become a PIA, its time to part.