Will there be new, low cost tax prep software?

[Anarchrist]

Would you care to elaborate on this observation?

Efilers are subject to revenue dept audits of their procedures and practices. During such an audit the ERO would have to open up his client files for the auditor's inspection.

[OldJack]

If this does come about, it might be your chance to cut back on caseload and still make a killing. If you've got those clients sufficiently buttered-up that they can't live without your expert assistance, then you could make an announcement like Toyota with their energy credit limit of 60,000 customers. Just mail out a notice that you'll be doing only 100 clients next year -- first come, first served -- and your minimum fee is $500 or $1,000 or whatever you think the traffic will bear.

I'm already in the mode you mention and all my clients are mostly older than me (and I am older than dirt). They would not dare go to someone else for their tax return preparation since I know everything there is to know about their taxes. I have always charged what the traffic will bear, if the taxpayer is wealthy (s)he gets my wealthy rate. I expect I will be dead by the time the IRS demands I efile.

[Mike Mac]

$5.00 charge

In MN, if you don't e-file a return that met all the qualification that would allow you to e-file it, the tax pro is subject to a $5.00 charge per paper-filed return. The tax pro is responsible to keep track of each of these events and fill out the proper documents at season's-end along with a check to cover the total times this happened. I am not sure what percent of the folks actually send any money to MN for this and at tax seminars even the Dept of Revenue folks snicker when talking about the surcharges.

I, like many others, did not initially like the thought of using e-filing but now I actually really hate the extra work involved with paper filing. I'd never go back.

[Black Bart]

Say Jack,

Actually, this debate will probably be moot in the not-too-distant future. Everson, having correctly concluded that smaller-firm CPAs and their complex-return clients haven't the slightest interest in efile, will take off the gloves and simply mandate it for any professional doing over 100 returns; followed by phased-in reductions to zero.

If this does come about, it might be your chance to cut back on caseload and still make a killing. If you've got those clients sufficiently buttered-up that they can't live without your expert assistance, then you could make an announcement like Toyota with their energy credit limit of 60,000 customers. Just mail out a notice that you'll be doing only 100 clients next year -- first come, first served -- and your minimum fee is $500 or $1,000 or whatever you think the traffic will bear.

[Black Bart]

Customer PR

I find that clients are happy with my service when I take a few minutes to sit down and review the tax return with them, show them where to sign, and offer suggestions on tax planning for the next year. Those few minutes makes your higher fee worth more...

I do it this way too and it works just fine except I feel like a psychiatrist/bartender sometimes, as they frequently take that few minutes (or sometimes 30) to tell me their problems: money, kids (that's a big one), or the gory details of their operation, occasionably (and regrettably) including a viewing of the scar.

In Re: efiling -- I agree with Linda, I want to help them if I can, but 30+ years have taught me that you can't give people too much credit or credit where it's not due -- if there's some blame that can be cast on either you or them for mistakes and foul-ups, it'll generally (not always) be hurled your way because they're just people and this is business -- it's not social work. Like Jack, I prefer to let them mail their own stuff and if the refund doesn't show up or the check didn't get cashed, then noboby's asking me "Did you send off (efile) my tax return?" Also, there's no "tracking" (acknowledged, accepted, denied, etc.) required. If there's a problem, you can deal with it after tax season.

Too, as Joe said, the bigger and more complex the return, the more efile info that has to be entered, increasing the possiblity of mistakes (I'll take my chances with IRS keypunch errors--it happens, but it's rare).

What's driving efile from my point of view (about a third of my trade) is that many people seem to want/need their money faster nowadays. Not necessarily like RALers (who want it PDQ), but the 10-14 days direct deposit seems more "normal" to them now rather than the old IRS 4-6-8 weeks turnaround time and many are willing to pay for the extra clerical time involved.

Actually, this debate will probably be moot in the not-too-distant future. Everson, having correctly concluded that smaller-firm CPAs and their complex-return clients haven't the slightest interest in efile, will take off the gloves and simply mandate it for any professional doing over 100 returns; followed by phased-in reductions to zero.

[thomtax]

Do you mention the benefit of the irs agent going through their file during an efile audit of your office?

Would you care to elaborate on this observation?

[Anarchrist]

I haven't had anyone refuse electronic filing when I explain the benefits.

Do you mention the benefit of the irs agent going through their file during an efile audit of your office?

[OldJack]

We don't have a choice in Minnesota. It is mandated here by the State.

I was like you. I refused to e-file, until I was forced to. Now that Mommy State made me eat my peas, I rather like them. If I now had the choice again, I would stick with e-filing.

So what would Mommy State do if you sent them a paper tax return? And if the taxpayer sent them a self-prepared paper tax return?

[George Boutwell]

[QUOTE=Bees Knees;37320]We don't have a choice in Minnesota. It is mandated here by the State. QUOTE]

But you do have a choice. You can pay $5 per paper return, instead. I think that's illegal, but there are enough good Germans in Minnesota that they will follow their marching orders. (My father, of German heritage, grew up near International Falls and later, Bemidji.)

My estimate is that it would cost $15 of my time to do the clerical work for e-filing. If my clients don't want to pay another $5 to file a paper return, I'm looking for a way to reduce my workload anyway.

[oceanlovin'ea]

Love efling

I love electronically filing tax returns. When I started out I filed direct with the IRS and then when Taxslayer Pro offered efling free I filed through them.

I feel like I am giving my clients the best possible service when I electronically file their returns. The paper return that I give them is exactly what the IRS receives. No keypunch errors. The client knows that the return has reached the IRS. No more wondering if it got lost in the mail. They get their refunds faster through efiling and direct deposit. If they owe money, the return is at least filed and they only have to remember to mail the payment in.They have the option to pay when they file also.

I know it is their responsibility to send it in but if with so little effort I can help them with that part too, I am glad to do it. I haven't had anyone refuse electronic filing when I explain the benefits.

Linda F

[Bees Knees]

Personally, I have refused to e-file tax returns as filing client tax returns is not my responsibility and my clients are not the type that care or request e-filing anyway.

We don't have a choice in Minnesota. It is mandated here by the State.

I was like you. I refused to e-file, until I was forced to. Now that Mommy State made me eat my peas, I rather like them. If I now had the choice again, I would stick with e-filing.

[JohnH]

Discounts are nice, but

this is the first time in many years that I'm going to pass up the discounts in order to delay the purchase decision until it absolutely has to be made. Given a software price of $1,000 to $2,000 and the uncertainty surrounding ATX, I think I'm going to plan to spend the extra $100 - $200 to keep my options open until the last possible minute. A wrong decision could cost a lot more in wasted time than the foregone discount.

[erchess]

Money is not part of the reason,

but I like e-filing and I usually require it. I don't get many returns that are ineligible for this service. The main reason I like it is that the return I prepare is the return that ends up in the government computer. I have had paper returns that got letters because of keying errors made when the agencies had paper returns. I have also had cases where supposedly I left off a W2 or other document showing withholding when I assembled a paper return. I've obviously have had problems with returns that got e-filed but as far as I know the problems were not caused by the e-filing. On the other hand, my clients are not the RAL crowd so I don't especially have my clients demanding e-filing.

[George Boutwell]

[QUOTE=OldJack;37278 I find that clients are happy with my service when I take a few minutes to sit down and review the tax return with them [/QUOTE]

I find that some of my clients are not that happy when I insist they stay with me while I work on their return, at least every year or so, but they usually end up seeing the advantage of having more than five minutes of communication with their tax preparer, and I often end up extricating some information from them that is helpful or needed in tax return preparation or tax planning.

I know that many practitioners follow the "Don't Ask, Don't Tell" method of return preparation -- send out a 30-page organizer for the client to spend two hours completing before sending it back for 15 minutes of data entry. If it's not in the organizer, it's not on the return. These are the clients, however, who are figuring out that TurboTax is just a $30 organizer, with the added advantage of allowing the user to play around with the numbers until the desired refund is reached.

[OldJack]

>>I know that many taxpayers aren't going to review their returns<<

I find that clients are happy with my service when I take a few minutes to sit down and review the tax return with them, show them where to sign, and offer suggestions on tax planning for the next year. Those few minutes makes your higher fee worth more to the client than the cheaper tax preparer down the street. Clients want personal service and are willing to pay for the trust you will create when providing that service. Do you really want to be know as the cheapest tax preparer in town?

edit: not meaning you George.