Customer didn't like their return...

[equinecpa]

I posted about this customer in my "what peeves me most thread".

I met with this client last summer, and assisted them with some business start up issues. She comes by (on a Sunday no less) in February and drops off her taxes. Of course like everyone else who is expecting a refund...she's in a big rush.

I did the return but there is no big refund...she owes a small amount. She got pi***ed, demanded why she was not getting a refund. She asked that I overnight her papers to her - I told her I'd happily send her papers and the return to her when I was paid. She was going to pay me via paypal....I haven't heard back from her. I sent her an invoice. Nothing...not another email, phone call. Nothing.

What would you do. Bill her for the work and then if you ever got payment send the return? Send her a reminder? Would you consider small claims? (This customer really p***d me off with her attitude). Call it water under the bridge...and chalk it up to the reason why I need to have an engagement letter for 2008 taxes?

Oh, she even accused me of holding her records hostage and informed me that she doubted it was legal. I didn't point out to her that if she'd come and get em she could have em - I'm just not getting to waste my precious time and money mailing them to the likes of her!

[veritas]

I would return the papers

From circular 230

SECTION 10.28 RETURN OF CLIENT'S RECORDS.

(a) In general, a practitioner must, at the request of a client, promptly
return any and all records of the client that are necessary for the client
to comply with his or her Federal tax obligations. The practitioner may
retain copies of the records returned to a client. The existence of a
dispute over fees generally does not relieve the practitioner of his or
her responsibility under this section. Nevertheless, if applicable state
law allows or permits the retention of a client's records by a
practitioner in the case of a dispute over fees for services rendered, the
practitioner need only return those records that must be attached to the
taxpayer's return. The practitioner, however, must provide the client with
reasonable access to review and copy any additional records of the client
retained by the practitioner under state law that are necessary for the
client to comply with his or her Federal tax obligations.

[Roland Slugg]

Send papers, not returns

It may very well be illegal for you to refuse to return a client's papers after receiving a request for them to be returned. I would mail the papers back forthwith, but not the completed returns.

[KBTS]

I believe you are required to return her original information such as W-2's, 1099's etc. to her; so even though you are angry right now, don't try to get even by holding her documentation. You do not have to give her the tax returns since she did not pay. It is possible that something has happened (health trouble, family emergency) to explain why she has not responded, so try to remain as professional as possible.

People like this are not worth all the hassle you are going through right now. I think I'd mail the stuff back to her (possibly postage due..ha ha ) and include an invoice for all your time spent on the return. If she fails to pay, send another notice or two and then just chalk the whole thing up as a learning experience.

[equinecpa]

Point taken but am I holding her papers? She is welcome to call me and come and get them. She requested I overnight them. As if...or maybe I should... with a COD bill for $300.

[Zee]

I would send the client a letter and email before the April 15th deadline informing her that she can pay for and pick-up her completed return & original documents at your office during normal business hours. You might add that If she'd prefer to have her tax return prepared elsewhere, she can pick up her original documents without payment. Some people can't be pleased. It isn't worth the effort to try to retain them as a client. I kinda also like the idea of a COD delivery requiring full payment.

[equinecpa]

I just sent her a friendly email follow up reminding her that the tax filing deadline is near and that I haven't heard from her, and asked if she'd like to come pick up her papers.

We'll see what kind of rude response i get...

[ED SMITH]

Did you look at the 2006 return to see why she owed money this year? She may have had more income, less withholding or estimated taxes, fewer expenses - deductions - credits, etc. If this is pointed out to the client, sometimes they will understand.

If this is the case, you may be able to point out that the previous preparer might have been in a position to advise her of the possibility of owing tax in 2007.

[wvtaxguy]

I recommend avoiding small claims. These frequently turn into malpractice counter suits according to my E&O insurer. Cut your losses and chalk it up to experience. Some clients just aren't worth the hassle.

[geekgirldany]

I would just mail the papers back to her. I learned my lesson last year. Make copies of everything she brought just in case.

[JG EA]

Yes make copies! Client was unhappy about owing and I offered to give her back all her papers and there would be no charge for my time spent already. She talked to someone who insisted she should be taking her home mortgage and I must not be doing the return correctly. She asked someone else who was a tax professional and he verified that yes she should be taking the interest. (No regular tax, no home office).

I told her my main goal was for her to have a return with which she is happy and please seek other advice.

She came and picked up the return after hours of my work organizing her self employment numbers, looking through her bank statement, and so on. We parted amicably.

Well, I guess she thought the return would be included in the package. She also thought the tax professional would take care of her. I'm not sure what happened there. Probably too busy. Anyway she called and asked if I would do the return after all.

I am very glad I kept copies of everything so I don't have to go through all the work. I am doing this for her, but I will not be able to help her next year.

About mailing it to her. I would also mail the papers regular mail but perhaps with return receipt requested. However, I would ask that she pick up if she lives nearby. It seems unreasonable that you spent your money giving her back her papers when it was her decision to stop the business relationship.

And one more thing. Don't even think twice about it. Rise above the situation. People like to get mad at someone. It makes them feel more important. It gives them reason to throw their weight around. She's probably not a very happy person. Make her day and let her think she won this one.

[Black Bart]

That's what I'd do.

I just sent her a friendly email follow up reminding her that the tax filing deadline is near and that I haven't heard from her, and asked if she'd like to come pick up her papers.

You're only obligated to do a tax return -- not to furnish a delivery service. If she wants the papers she can come and get them; if she doesn't want to go to the trouble, then that's her problem. If she called and asked me to mail them, then I would send them by regular mail, but no way would I overnight it (people will ask for the shirt off your back if you're dopey enough to hand it over).

Problem is, it's hard to generalize about these cases because some you want to get rid of so bad you'll do just about anything to get shut of them, while others aren't so pressing. Depending on the circumstances, I've handed back papers (but not a return) at no charge, mailed stuff back (some certified with return receipt), or occasionally just let the stuff lay there. About a dozen returns from 1-10 years old are now gathering dust in my storage room and I haven't been sued yet (many of these cases are lightweight semi-deadbeats who can't buy lunch, much less hire a lawyer).

[AZ-Tax]

Starting taking a downpayment..

This last year is the first year I got stiffed. No more, I will require a down payment of (probably $50 - $100 up front) to be included in the tax documents they mail me. The only concern I have is the new clients but most of my new clients are from my church parish. I also have other sources of income like auto, home, life etc. insurance to supplement my income so I can reduce having to take on clients and/or retain clients that try to negotiate my tax prep fees.

Other then that, I agree with Black. Let the taxpayers come pick up their documents. I currently have a client now that is waiting the last minute to file and I cannot get it done by the 15th. If the client wants to go some other place, the client needs to pick up their docs.

Curious, what methods work to get rid of those unwanted clients?

[JohnH]

You invoice is the best way to get rid of unwanted clients (or else drive the price so high that you do want them, hassle & all). I have one or two clients whom I truly dread to see coming in the door, but I sure to like cashing their check when their work is done.