I learned this business in a firm that taught me to let my clients make all the decisions. It was my job to explain what the choices were and the known and potential consequences of each. For example, if you take the 179 Election to Expense this property you will save money now but in future years you will have less or no depreciation and if it's a vehicle you will probably have a lower expense deduction for its use. Then I worked for a firm where I was told that people were idiots and I needed to size up the situation and make all decisions for them with an emphasis on making this year as painless as possible and little to no concern about the future. I now think that my first employer was correct and my second was teaching me to be unethical but I wondered what others think.
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I have to agree with your first employer. However, over the years I've treated most of my clients as did your second employer. Most clients do not understand this stuff. Hell, many accountants don't get it either.
Over the last 3 years, I've managed to let the client decide what they want done. I've been doing it this way because I've come to realize that it is their business, and they should make the decisions, not me. I explain their positions/options as best I can and let the cards fall where they may.Dave, EA -
Who decides
If it is nickel and dime decisions, I make the decision. If it involves significant money, I explain the options and give the client my opinion, then let him decide. Often they don't feel qualified to make the decision and tell me to do what I think is best. I do the same thing if a doctor tells me that I have options--I don't feel qualified so I would tend to accept the doctor's opinion rather than to try to decide whether I need brain surgery or just take two asprins and call me in the morning.Originally posted by dsi View PostComment
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I hear that -
so often there is only one legal option at all or only one that makes any sense for the client. Where I try to get them to make the decision or at least offer me guidance is on elections that have plusses and minuses. How would you like to help them take their one time exclusion on the sale of a home and then the next year they sell another, higher priced home? But if ya didn't ask if they had other homes they might not think to tell ya. This is why I try to persuade the client to be my partner as we work together on their taxes. I repeat back to them what I understand to be the facts of their life and I tell them the relevant regulations. I could probably do another couple returns each day but I would not be giving the excellent customer service for which I desire to be known.Comment
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Risk Tolerance
Is the one thing I try to get out in the open. If they are taking an agressive position I remind them that it is them, not me who will get the certified letter in the mail and encourage them to do a "gut check" before deciding if they really want to claim 30,000 business miles.
Now with the revised Circ 230 rules I will have to set firmer boundries regarding what I'll allow on the return. I will ask to see documentation and ask harder questions about items that seem out of line.
If that doesn't suit them there is always the door.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de TocquevilleComment
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I agree with all that Dave said.
I have certain lines that I use on taxpayers who I think may be less than honest. I can look them dead in the eye and say either of these with utter seriousness:
I have never lost a client to the electric chair and I don't want you to be the first;
You know, I like you but you need to be aware that even if they stick us both at Fort Leavenworth they won't let us be roomies.Comment
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