This is a little long, but read it if you have time

[JoshinNC]

Attached is a link to an article that ran in our local paper, to which I responded by email to the writer. If you have a couple minutes take time to read the article and my response. Do you folks believe I resonded properly?

Happy Easter!

http://www.newsobserver.com/104/story/561969.html

Ms. Parker,

I greatly appreciate your column. Most of the time you have very sage advice, especially for those attempting to get the most for their money. However, as a practicing accountant here in Wake County I have to disagree with your comments related to the use of tax professionals. While it is true that there is a multitude of do-it-yourself software available to consumers, and the big chains have had their issues, I feel it is unfair to paint all tax professionals with the same brush. My wife and I own a small, 2 practitioner practice and provide tax and accounting services to our clients at very affordable rates.

One of you comments in your article particularly disturbed me. You stated that, "If you don't qualify for free filing, you could pay $30 to $100 for do-it-yourself online tax software" and "That cost could easily double to $200 or more if you have a tax preparer complete a basic federal return". I am not sure who or what firms you polled to determine this rate, but that is definitely not what our firm charges. I am an Enrolled Agent with the IRS, meaning that I passed a grueling 2 day exam and am enrolled to practice before the IRS in many types of representation engagements, and my average preparation fee for the 2006 filing season is $136. This includes preparation of a 1040, Schedule A (Itemized Deductions), NC return, electronic filing of the returns and 30 minutes of free personalized financial advising at anytime throughout the year. We provide a distinct personal service to our clients, and they realize the value of these services. While I understand your desire to capitalize on the unfortunate behavior of those who see tax preparation as a commodity and are willing to blatantly disregard the law in search of a few bucks, I appeal to you to check the facts more thoroughly before making such broad reaching comments about an entire industry.

On the other hand, more than 30% of my revenues for any given year are derived from representation engagements in which I either amend self prepared returns or represent those taxpayers before audits due to ill contrived deductions and income reporting. So, while I have a serious disregard for do-it-yourself software, it does provide me with an additional revenue stream that does come in handy throughout the year. We who are true tax professionals have a saying that goes like this, "Tax preparation software is no substitute for tax preparation knowledge."

I hope you revisit this column at some point to point out these sharp contrasts to your readers and keep up the good work otherwise.

Joshua R Whitney, EA
Advantage Accounting & Tax
Fuquay-Varina, NC

[Bees Knees]

The fact is, people attracted to do-it-yourself software are the same people that do-it-themselves in every other aspect of life. I used to spend the entire afternoon changing the oil in my car, 45 minutes to drive to Target to buy $12 worth of Oil and a filter, 45 minutes to drag out the tools, oil pan, and other stuff needed to do the job, 45 minutes to figure out how to jack up my car, 45 minutes to figure out how to get the oil plug off, drain the oil, get the oil filter replaced, and re-fill the oil, and 45 minutes trying to figure out how to get the oil stain off my $75 jacket.

Then I discovered that for $21, I could sit in the lobby of Rapid Lube reading the paper for 30 minutes while an 18 year old kid changes the oil for me. It cost me $9 more, but I saved a couple hours of time and a lecture from my wife for ruining my jacket.

Sure, there was a 1% chance the kid would forget to put the oil plug back in my car, but if I was really concerned about that, I could easily take a peek to see that he did in fact do it. Oil changes, like tax preparation, is not rocket science. Some people get a big thrill saving $9 by doing it themselves. The rest of us have learned that less hassle is worth spending a few extra bucks.

Your letter will never change the mind of the do-it-yourselfer. His column will never change the mind of the rest of us.

[Chief]

Tax Preparers

In the last issue of TaxPro is an excellent article on why use the professional Tax Preparer.
Bee Knees is right you will never change the mind of a do it yourself.

[veritas]

Nice reply

JoshinNC

Here would be my resonse:


Dear Ms. Parker,

I very much enjoyed your article about doing it yourself tax preparation. I believe you are on to something. And since you encouraged me to do my own taxes naturally I felt emboldened to do some other things.

I called your papers subscription department and cancelled my subscription. I realized I can do my own news! I have a computer and the internet and information is available to me from all over the world. What's more I have started a blog and am getting fees from sponsors because of the large number of hits I get at my website everyday.

The other thing is Ms. Parker, have you heard of Craigslist? It is a wonderful FREE way to sell my old car or look for a job.

Thanks again for the advice and encouragement to millions of us out here.

Yours truly,

veritas

[Black Bart]

Well,

...Do you folks believe I resonded properly?

I liked it.

[ChEAr$]

And so did I.

I liked it.

Josh, you should send a copy of your letter to NAEA, attn: Gigi Jarvis.
You'll find her email address on our website.

[BP.]

http://www.irs.gov/pub/irs-pdf/i1040.pdf?portlet=3

Here's a link to the time burden page of the 2006 1040 instructions. Interesting that the writer has boiled down the time needed for DIY 1040 tax prep to just 3.7 hours. The chart in the instructions shows 3.7 hours for forms completion only, but 30.3 total hours for all the tasks involved in someone doing their own taxes. Poetic license, I guess. Agree DIY'ers won't be swayed, until that inevitable "weird' event crops up for them. Our clients know how indispensible we are to them.

[Bees Knees]

I had a client ask me what she was supposed to do with her property tax statement. She thought her mortgage company was paying her property taxes, so she didn't know why they sent the statement to her.

And no, she is not blond.

Some people are not capable of doing it themselves.

[KBTS]

Good Job Josh

Very nice response.

[JoshinNC]

Thanks all!

I will forward this to NAEA. Thanks, Cheers.

[Joe Btfsplk]

Do it yourself

For many people, doing it yourself is a valid undertaking. If all you have is a W-2 Form, some mortgage interest and some real estate tax and a donation of $ 500 worth of old worn-out clothes, then you probably should be able to do it either manually or with a low-price software program.

However, it depends. Some people couldn't do even that type of return. But most college graduates probably could, although some of them don't. I've prepared simple returns for college professors and for one guy who had a PhD in math.

But if I need to change the oil in my car, that would not be my cup of tea, so I let a pro do it. I have, however, been known to wash my own car.