Annoying new Trend in my clients

[equinecpa]

I have encountered a new problem this year with a couple of my clients. Here's the preamble:

One client asked me to prepare his 1099's for him this year. No prob says I. He sends me his Quickbooks file. I notice it doesn't appear that he has a lot of possible 1099 vendors marked so I correspond with him, get pertinent info from him and all is good. 1099's get done.

Fast forward to the beginning of April. Stranger calls me. They didn't receive 1099 from abovementioned client. This is odd, thinks I,. Why are they calling me , shouldn't they be calling my client ? Anyhow I look up in the books and they weren't marked as a 1099 recipient. They give me the info and I do 1099 (after discussing with my client) Another call comes, the 1099 is not right. I tell them sorry that's the information in the books, if you have a problem call my client. This person persists in telling me the 1099 is wrong as it was for the net amount paid to him and it should be for the gross (client is in the trucking industry and gives them his gas card, and deducts gas paid from pmt amounts). I reply, I"m sorry I only can go from the records I have.

Then yet another vendor for this client calls saying the 1099 is wrong, I tell him the same story. He says he needs a correct one. I told him I wouldn't be doing it anytime in the first two weeks of April, the 1099's were already filed. He gets pissy and I just apologize and tell him its not in my hands.

This scenario happened with 2 clients this year! I don't want to tell the clients to go elsewhere to have 1099's done as I can't be bothered but I certainly don't have the time to be bickering with these people who aren't even clients! What would be a strategic way of handling this? Should I tell these people I can't talk to them, I can only talk to my client (problem with this is I can foresee my clients saying it is OK ...even if it is not OK with me).

Then yet another client has his parents calling me (three times this week, more if I include the times they didn't leave messages). They guaranteed a loan on his behalf and need their names off of the loan. The bank needs the tax returns to redo the loans. My problem is my client is terrible about providing me accurate information and somehow expects me to complete the tax return. About 10 emails and 5 phone calls later I still don't have the correct information.

I would fire all of these customers if it weren't that I personally LIKE them. They just are complete PIA's. I do get some satisfaction in charging them full pop for all this wasted time but in April wasted time is something I can't afford whatever the price.

Any suggestions.?.I'd like a nice way of communicating to my clients that they are not to give my name to vendors to call me for information ...unless preauthorized by me.

Carolyn

[JohnH]

Carolyn: Why is chargeable time wasted time?

I have a couple of this type of client as well, and I'll talk to the vendors about anything they want to talk about as long as the client is willing to pay for the time. If the client ever starts to complain about the bill, then I'll suggest that they may want to handle these calls. As long as they don't mind the pain, I appreciate the extra work, especially since it doesn't require too much thought.

One thing I do to help with the complainers is fax or mail them a printout of the payments that made up the 1099 entry, then ask them to let us know which of the checks on the list they didn't receive. I don't recall ever hearing back from anyone after doing that.

[ChEAr$]

Your best policy

is simply to tell all other callers to deal only with the client. All communications, whether from
a subcontractor, parent, or employee should be handled that way.
No exceptions.

You know the place for contact name and number on the 1099's? it's not my name and number.

[equinecpa]

Carolyn: Why is chargeable time wasted time?

Because in April I have none to spare...and I just don't like non-productive time.

You know the place for contact name and number on the 1099's? it's not my name and number.

Now isn't that the truth?

I probably need to lose these clients, good paying or not, PIA factor is too high.

[Snaggletooth]

Billing doesn't solve everything

Why is chargeable time wasted time?

John, the doctrine of "let's convert client PITA problems into billings" is an opportunistic mindset, but it just doesn't solve everything.

The equestrienne works hard to build a reputable tax practice, and now a half dozen angry people in her town are calling her with the predisposition that she has screwed up their tax reporting. Even at her best, very few of these people are going to have their anger assuaged, even if presented with facts. She is going to suffer "guilt by association" irrespective of whether she is correct.

We also cannot dismiss the possibility that the QuickBooks file she assumes to be correct may be only one of multiple sets of books. There is also invasion of responsibility and a number of ethical questions. At least two of her customers have "ducked" the questions of recipients.

Billing out to compensate yourself for clients' idiocy is a good way to turn our misery around, and also helps to educate them as well. But all things considered, no amount of billing can compensate this lady for this kind of damage and fallout.

"...this sad old earth must borrow its mirth, but has problems enough of its own" - E Dickinson

[JohnH]

Snags:

I agree completely that converting the PITA clients into billings doesn't solve everything - but for me it's a great starting point.

You hit on another very important point with respect to the fact that a half-dozen people in her town have the predisposition that she screwed up their tax reporting. I agree with that as well, but they came to that conclusion when they looked at the 1099, well before the point at which they called her. I'm thinking that when someone believes I screwed something up, I want to be a part of the conversation in setting things straight. Better that I control that process than a clueless client, who will likely dodge the question and still leave the vendor unsure about where the mistake occurred, or even if there is a mistake. That's why my first response is to send the vendor a printout. It's amazing how enlightening the facts can be when someone complains that "I just don't see how I could have made that much."

Having said all that, I do also agree that there are PITA clients you just can't charge enough, and so they must go. It just seemed to me that this wasn't where we were, based on equinecpa's initial post.

[Bees Knees]

Everyone has missed the point.

You CANNOT talk to anyone about your client unless your client has signed a written statement authorizing you to discuss the matter with a third party.

Your client’s 1099 information is a part of your client’s tax return. You cannot even acknowledge your client is your client to a third party unless your client authorizes you to do so, in writing.

That should solve the issue. You prepare 1099s for your client. You put your client’s phone number on the 1099. If a 1099 recipient calls you, presumably because your client gave them your phone number, you simply say, “I’m sorry but I am not authorized to talk to you. The law requires me to keep all of my client’s information confidential, unless my client gives me written permission to talk to you, which he/she has not done.”

You can apologize for not being able to help the person, and sympathize with their problem, but your hands are tied. Sorry, but that is the law.

Then after you get this person off the phone, you immediately call your client. Explain that they are not to give your phone number to their 1099 recipients unless they sign a written statement authorizing you to talk to them.

If the client wants to sign the written authorization statement, then you explain the new fee structure to your client. Do they really want to pay $150 per hour to talk to their 1099 recipients? That could get very expensive, plus, if the recipient disagrees with the dollar amount, it could take you some time to figure out the problem.

Make it clear that by providing written authorization to talk to their 1099 recipients, they are authorizing you to charge an hourly fee to fix their problems. And you have no idea how long it could take to fix the problem if the 1099 recipient does not agree with their figures.

Chances are, your clients will agree to handle the matter themselves rather than paying you to do it.

Problem solved.

[equinecpa]

[quote]John, the doctrine of "let's convert client PITA problems into billings" is an opportunistic mindset, but it just doesn't solve everything.

The equestrienne works hard to build a reputable tax practice, and now a half dozen angry people in her town are calling her with the predisposition that she has screwed up their tax reporting[\quote]

The good thing is both these clients live 100's of miles away from me -the people affected by the 1099's I will never meet, so at least I don't have "bad word of mouth" fallout.

I just need suggestions for new policies (even if I send these ones down the road, I'm sure there will be more like them). I guess if it happens again

a) I won't talk to the client vendors-I'll politely tell them that they need to discuss the matter with the issuer -who is not me;
b) I'll also inform my clients not to give my contact information out to their vendors since I'm not the one responsible for the slips. They can report the discrepancy to me directly if they are concerned.

Do you think this will work?

[Zee]

If you live in a small town, all of those folks are going to be telling their friends how you screwed up their 1099's and created problems for them. It doesn't matter it isn't your fault. How did they know you were the person who prepared the 1099's?

So, you might want to consider getting rid of these clients. They may be causing you to lose potential clients.

[Jiggers]

Well said

Everyone has missed the point.

You CANNOT talk to anyone about your client unless your client has signed a written statement authorizing you to discuss the matter with a third party.

Your client’s 1099 information is a part of your client’s tax return. You cannot even acknowledge your client is your client to a third party unless your client authorizes you to do so, in writing.

That should solve the issue. You prepare 1099s for your client. You put your client’s phone number on the 1099. If a 1099 recipient calls you, presumably because your client gave them your phone number, you simply say, “I’m sorry but I am not authorized to talk to you. The law requires me to keep all of my client’s information confidential, unless my client gives me written permission to talk to you, which he/she has not done.”

You can apologize for not being able to help the person, and sympathize with their problem, but your hands are tied. Sorry, but that is the law.

Then after you get this person off the phone, you immediately call your client. Explain that they are not to give your phone number to their 1099 recipients unless they sign a written statement authorizing you to talk to them.

If the client wants to sign the written authorization statement, then you explain the new fee structure to your client. Do they really want to pay $150 per hour to talk to their 1099 recipients? That could get very expensive, plus, if the recipient disagrees with the dollar amount, it could take you some time to figure out the problem.

Make it clear that by providing written authorization to talk to their 1099 recipients, they are authorizing you to charge an hourly fee to fix their problems. And you have no idea how long it could take to fix the problem if the 1099 recipient does not agree with their figures.

Chances are, your clients will agree to handle the matter themselves rather than paying you to do it.

Problem solved.

Bees Knees, well said. In my small community clients tell the employees or 1099 recipients to just call me to get a copy, or explain the amount, or whatever. I do exactly as you said. There is never a second call from that client or whoever he gives the W-2's and 1099's to.

Clients are notorious for asking us to "call my broker/bank/supplier/etc. to get this or that information". I explain the confidentiality laws now and then say that I must have written authorization from them to get this information, and to get this information I do charge. Really cuts down these P*I*T*A clients.

Make the client responsible for their actions and to get their own information.

[outwest]

Interesting range of approaches...

One person's PITA is another's billable time.
One person's annoying interruption is another's opportunity to show outstanding service.

Guess every practice is different.

What qualifies as written permission?

I was musing about putting a permission form on my web site that a client could print, fill out and fax back. Pretty sure that is okay, but what about emailing the form back? Signature is a problem? Spoofing? Security? Shoot, maybe those would be problems with a fax now that I think about it.

But on the other hand, a lot of commerce is now done on the web. Including the reorders of the taxbook. And filing of tax returns. I send encrypted PDFs to clients.

FYI, my engagement letter already has a section with permission to use email to communicate.

[equinecpa]

And how did I miss BEES answer the first time around LOL. It's perfect...

Thank-you

[taxxcpa]

1099 errors

You might also explain that all you do is transcribe information you receive from the client, so if the 1099 is incorrect they should get the client to correct his books, then provide both you and the person calling you the new, correct amount. If they give you a figure which both sign as correct, you can then prepare a corrected 1099.

If they get a 1099 for LESS than they received, that should be no problem on their Schedule C. However, it might be a problem if they have to show someone the 1099 for other purposes.