Client seeking second opinion

[MichaelDi09]

I have long time Client (over 15 yrs), and family friend of over 50 yrs, who just sprang on me , he is getting a second opinion, on preparing his Income taxes for 2018.

I informed him, he will over $9000 in additional taxes, and I guess he didn't like messenger.

Client is a regular monthly client, has monthly payroll, and sales tax that I handle as well. Caught me by surprise, since we have known each other for 50 plus years.

Keep in mind, Client has paid estimated taxes, but only at times, and amounts, when he had extra cash. I can only do much. He knew the situation , as I provide him monthly P/L Statements during the year.

Should I just let him go , as I feel he is second guessing my work? If he can't trust me to do my job, then maybe he needs to go. I HATE losing business.
Appreciate any thoughts.

OH, he tells me his second opinion, is going to file the 4868 for him.

[ATSMAN]

The hand writing is on the wall! Let him go ASAP. You will be glad you did that in the long run for your sanity. Last year I had a similar situation with a LLC client whose girlfriend convinced him that he could do better somewhere else. Guess what, I got a call from him in March wanting to come back. Guess what my answer was!

[Burke]

I have long time Client (over 15 yrs), and family friend of over 50 yrs, who just sprang on me , he is getting a second opinion, on preparing his Income taxes for 2018.
Appreciate any thoughts.

He's hoping for better results and probably won't find them. In any event, he may leave the business stuff with you. And under the circumstances of your long-term relationship, if he has second thoughts next year, I would take him back with no recriminations. Be magnanimous.

[JohnH]

MichaekUDi09; Separate your emotions from your business decisions. Allow the two to intersect and you're much more likely to make huge mistakes. Chances are, if the client is already considering someone else, then as ATSMAN has stated, it's already over and the 3rd party oversight is just a gentle way for him to let you know he's leaving. Sounds to me as though the client is already a bit of a headache so you might be able to use the time more productively if you don't have to deal with him, especially since he already doesn't follow your advice.

On the other hand, what's wrong with saying to him "I can see why you might have doubts since you owe so much this year. I'm comfortable that my work is accurate, so I welcome the outside scrutiny. We have a long history so let's not throw the baby out with the bath water. Let's be sure to compare their results with mine when they finish, just to be sure THEY didn't misunderstand something." Depending upon how profitable he is, I MIGHT even offer to reimburse him all or part of what he paid for the second opinion (but I wouldn't mention that until and unless he follows though with the comparison, and then only if I wanted to keep him on as a client).

You're in business to make a profit, not necessarily to make friends. If friendship comes along with the relationship that's fine. It often happens in this line of work. But don't let friendship, ego, and and emotion be the driving factor in doing what's best to grow and sustain your source of income. Clients are there for profit - family is there for emotional support.

[Burke]

John, John, John... I agree that business is business and if that is the only reason OP is upset (losing the money), then okay. But I treasure the relationships I have built over 30+ years with my clients. (Most of them). I like what you said in the second paragraph, except I would not reimburse him for the second opinion regardless. Let him bear that cross.

[kamckinley]

That's a tough one since he has been a family friend for so long. Normally, I'm happy to let a client go (they are usually the PITAs), but in this case, I agree with Burke and JohnH. I like John's approach of comparing results, hopefully the client will see the light and realize you have been doing a good job for him. Good luck!

[MichaelDi09]

I appreciate all your thoughts and will try to keep my emotions out of it. Also, I am confident in my work and if he doesn't appreciate it or understand all I do to minimize his tax situation , then, yes, I will opt to sever our business relationship.
When he told me he was getting a second opinion, I did tell him, "By all means, do what you feel you need to do , but understand, I am doing my best for you".

Btw,his tax situation isn't new. He gets behind on an annual basis, and then panics at year end, when I remind him of his tax situation. And I do that over the course of the year, so its not just sprung on him.

Thanks again!

[ATSMAN]

>>> You're in business to make a profit, not necessarily to make friends. If friendship comes along with the relationship that's fine. It often happens in this line of work. But don't let friendship, ego, and and emotion be the driving factor in doing what's best to grow and sustain your source of income.

Well said and that is precisely why I will NOT prepare the tax returns of my two best friends and my brother-in-law. The emotional price is not worth it!

[JohnH]

John, John, John... I agree that business is business and if that is the only reason OP is upset (losing the money), then okay. But I treasure the relationships I have built over 30+ years with my clients. (Most of them). I like what you said in the second paragraph, except I would not reimburse him for the second opinion regardless. Let him bear that cross.

Burke, Burke, Burke... After all is said and done, it's still a business, not a place to get our emotional needs met.

BTW, the suggestion about POSSIBLY covering part of his fee was serious, and definitely business-driven. The cost of replacing him as a client would likely be much higher than the relatively minor cost of offering to share part of the fee. Losing a few months without his fees would cost considerably more. Secondly, if he's already a profitable client, investing the equivalent of a month's fees (or thereabouts ) to solidify the business relationship would be a strong goodwill booster. Thirdly, nothing precludes raising his fees incrementally in the future, (provided of course that he's still around).

If I were to do this, I'd have a number in mind at the outset. Let's call it $250. If he says he paid $500 or less to the other person, I'd offer to cover half. If he says he paid $750, I'd offer to cover a third. If he says he paid $1,000, I'd offer to cover a fourth. You get the picture. If he asked why I'd do that, I'd tell him it's a low-cost, no obligation peer review that benefits me as well as him. If he's REALLY a "friend" and is fair-minded, he might refuse the offer. In any event, I'll know more about him and about our business relationship than I did before. So doing the unexpected will potentially yield benefits to me way out of proportion to the cost.

[TAXNJ]

I have long time Client (over 15 yrs), and family friend of over 50 yrs, who just sprang on me , he is getting a second opinion, on preparing his Income taxes for 2018.

I informed him, he will over $9000 in additional taxes, and I guess he didn't like messenger.

Client is a regular monthly client, has monthly payroll, and sales tax that I handle as well. Caught me by surprise, since we have known each other for 50 plus years.

Keep in mind, Client has paid estimated taxes, but only at times, and amounts, when he had extra cash. I can only do much. He knew the situation , as I provide him monthly P/L Statements during the year.

Should I just let him go , as I feel he is second guessing my work? If he can't trust me to do my job, then maybe he needs to go. I HATE losing business.
Appreciate any thoughts.

OH, he tells me his second opinion, is going to file the 4868 for him.

Take the client to a farewell lunch or give a small farewell gift for being a client for 15+ years.

Getting a “second” opinion is quite possibly a way of saying goodbye. Sounds like he is doing you a favor especially based on what you state about what you have to do for the client.

Let the client go as he probably hired the new firm by filing the 4868 for him.

Now it’s time to think of yourself and your business and get a replacement business client that pays what your worth.

Business is business.