Do you demand payment for this?

[anu31402]

I am having a situation now. Three new clients, at various time were referred by my old clients. I asked all necessary questions and prepared each tax. One could not understand while she is not getting a lot of money like others.

Each decided they would go to elsewhere. This gets me thinking to consider a charge next time a "refund shopper" walks into my office.

Please, could anyone share their experience and how they deal with this. Each time I felt my time has just been wasted. My office is in the heart of NYC with all of the overhead costs.


Kay, EA

[S T]

Unfortunately

Not all taxpayers returns are the same, due to income, due to marital status, due to exemptions, due to the amount they withhold, and also due to deductions,etc.

Most of my clients are referred by my "long time clients", so having dealt with this a long time ago, I injected in the conversation with my long time clients, I appreciate referrals, but "all things not being created equal" it might not be wise to discuss fees you paid for tax preparation, or amounts of refunds.

Seemed to work, as I don't receive many of those issues anymore.

If a referral makes an appointment, I let them know that there is a charge for the preparation and the time. Just because they don't like the "bottom line" of refund or amount due is no excuse not to pay me for the time and knowledge.

Sandy

[Kong]

Shoppers

I make it clear that a Tax return begins at $$.$$ and if they have the money.
They give me crazy look. I ask them if they want an estimate. Happy Face yes.

I tell them its $30.00. They walk out.

[BOB W]

I had a situation many years ago and I learn from then on.

A walk-in said "How much will I get back"?

I don't know until I enter all the info, I said

Which I proceeded to do. When I was done I told her the amount.

She said "Oh that is too little". (She had 1 W-2 no kids and single)

With that she said no thanks and wanted her W-2 back. I told her that I need to be paid for my time. "I only have $20 on me". I'll take it", said I. She gave me the 20 reluctently and I gave her the W-2 . She then stormed out the door like I robbed the 20 from her.


Now the lesson learned. If I have any hint of a problem, and there are always hints you just have to listen, I make sure that my fees are explained up front. In the case above, I should have added that "I also charge for my time for you to know your refund amount.

[erchess]

I am not a lawyer

so my knowledge of the law is limited to what I have been told by people who in my judgment should know what they are talking about For example, when my District Manager in a large tax firm tells me something about state laws governing our business, I believe him. I have been told that in North Carolina if you want to charge someone who has learned the bottom line on a return and does not want it, you need to have previously obtained their signature on an engagement letter or contract. Furthermore, my reading of Circular 230 says that even with that signature I have to give them their documents back without precondition and then if I wish I may undertake collection efforts. Bees, and I right about what Circular 230 says?

[JohnH]

How about this?

When a potential new client asks for a ballpark figure, just say:
"I don't do estimates - I prepare tax returns."

Then proceed to have them sign an engagement letter before undertaking any work. It won't guarantee that they won't ask for their info back and refuse to pay if they don't like the outcome, but it does you one step closer to an up front agreement before actualy doing any work.

If they don't want to sign an engagement letter before knowing the result, you're probably beter off without their business. And you've only invested the time it takes to explain the engagement letter & your policy to them, which is something you normally do with any prospective client whether they decide to use your services or not.

[myerstaxes]

I Charge them for prep work

I have a client who asked me to do his son's return...The son is a full grown adult, I did the return...The son did not like the results (he owed) so he went somewhere else....When I asked for payment of the "delievered" return, they said well he went somewhere else...I said, that does not matter, I did the work! The dad paid me, because he said, you are right, you did...

[anu31402]

Thanks for your inputs...

I appreciate the fact you were able to share your experience with me. I am still growing my client base and I just didn't want to look bad before my old clients who referred them. But I will definitely let future ones know upfront I charge fees even if they decide to shop elsewhere.


Kay, EA

[JohnH]

The worst situation

I think one of the worst situations is to have a major client, big revenue producer, with whom you have a long-term relationship, and they have an adult son or daughter who turns out to be a flaky client. I've had to deal with a couple of these situations and it's a royal pain. In several cases, I'm not sure I handled it right, but my usual course of action is to keep driving the fee up until they go away.

I did have one situation where the daughter wanted me to fabricate Schedule C info for her and her husband so she couild apply for a loan to enable them to buy her dream house. I had prepared returns for them for the previous couple of years and I knew the numbers she provided were fake. She actually got mad when I refused to be a party to a fraud, but I was prepared to lose both clients if she complained to mommy & daddy and they happened to take her side. Fortunately she found someone else to do her bidding, and I still have a good working relationship with the parents. (I've concluded that they know their daughter and me well enough to know that I must have had a good reason to refuse to do work for her.)