[Anonymous]

I am so happy tax season is over, I cannot see straight.

I am sick of unscrupulous tax clients wasting my time, only to leave when they find out that I will not become their partner in crime and I will not omit income or bulk up deductions. C230 enforcement by the IRS against Preparers is becoming ridiculous. The clients come to me and then, because I am very very thorough and actually verify information (for instance, I ask for a copy of their paycheck to verify that medical premiums are in fact post tax before deducting them on Schedule A) they leave without paying because I clearly don’t know what I am talking about—despite reading them the regulations.

The worst was a pastor this year who refused to include the federally taxable portion of his parsonage allowance (the amount that exceeds the lesser of his salary, actual housing expenses, or fair rental value of his home and furnishings). Oh and he also wanted to deduct on schedule A his medical premiums that were taken out of his wife’s check pre-tax (she’s a teacher for crying out loud). After I reviewed his items, I told him to come pick up the documentation or let me prepare the return correctly. He chose to go elsewhere. He will eventually be audited and trigger a six year review and assessment of penalties and interest. I am so tired of “that’s the way my other accountant did it” or “I was audited and it resulted in no adjustments”. It’s against the freaking TAX LAWS.

Another client this year refused to include the personal mileage use of the vehicle provided to her by her company. So she chose to go elsewhere when I demanded she provide her personal mileage—this after I worked until the wee hours of the morning to ensure I got this return completed before leaving for my Mom’s funeral. Unbelievable.

The sad thing is that they KNOW I know they are cheating on their taxes and don’t care. What’s wrong with people….it’s not that these are grey areas where it becomes a matter of judgment. Now these clients will go down the street and know what NOT to tell the next preparer who will do the returns without as much as the first question or verification. When caught, they will sue the Preparer (and on some level rightly so).

At what point did our profession become see no evil, hear no evil, speak no evil when doing returns? I treat my clients like family and consider myself their advocate—what service have I done if the client is audited and receives significant interest and penalties via adjustments? I’m there to ensure my clients’ returns are audit proof, not there to deduct/omit and hope the audit lottery doesn’t catch us.

If I keep this business open next year, I will collect my non-refundable fees up front and have sections in my engagement letter which address disputes over tax law. They are free to go but will not receive their fees back. I am part-time and can only do so many returns a year ( I try to select very honest and professional clients) so everyone holding a slot in the roster is someone else I cannot do. So technically each of these slimeball clients who leave, they take away two spots—theirs and the others I had to turn away because I was full.

Grrrrrr!

[Anonymous]

It's funny that you mention a pastor and a teacher. My boss is the treasurer of his church and has been for nearly 30 years. He knows how pastors get paid and what is taxable and non-taxable. I was the insurance clerk at the school board for 6 years and I know that health insurance is withheld before taxes and how teachers salaries are computed. A few years ago we had a pastor, not my bosses pastor, tell my boss that “He didn't understand how pastors get paid.” He came in last year looking for help because he got audited! They went back 5 years, the length of time he had been a pastor. He paid a ton in penalties and interest. He paid his bill, which was way less than it should have been, and never thanked my boss for all of the work he did or admitted that he was wrong. But there are bad apples in every bunch so this is not meant as an indication of all pastors. Most of them are afraid to take legal deductions and end up paying too much in tax.

This year we had two school teachers argue with us over their insurance premiums. I finally had to show them on a piece of paper what their pay would have been if they had paid their premiums with after tax dollars. In their defense, most school teachers don't realize how their pay is computed. It can be convoluted with sales tax dollars that are dedicated to salaries and certain additions for being highly qualified. Luckily I know how it is computed, having worked in payroll, and was able to explain it to them. They both signed their returns and seemed happy with our work. They paid their bills anyway.

I feel sorry for the people who think they can deduct things when they can't, like the lady who wanted to claim her husbands son who has been in prison for 6 years. She honestly didn't know she couldn't do that. The person who did her taxes last year claimed him. I'm almost done with her amended return and she is going to owe but she said she just wants to make sure it's right.

I am so sorry about your mom. It is never easy to lose someone so close to you.

[Anonymous]

I lost a few clients this year too because I wouldn't revise their return to “get what they got last year” or what “my friend got”.

A new client came in a few weeks ago and I spent an hour interviewing her. Over the next few weeks she'd send me bits and pieces of information and wanted to know where she stood almost every day with the new nuggets of expenses she had found.

She finally came in yesterday when we were closing up to sign and pay. She told the girl up front, “You tell her (me) this is ridiculous. This is too much to pay for something that I essentially did myself. I won't come back here ever again.”

Hosta la vista, baby!

[StellaFL]

I've had my share of those types of clients over the years. I've had to systematically weed them out, sometimes by outright firing them. Just not worth me losing sleep over a client who may end up getting audited and trying to blame me.

The problem is, most people just don't understand how our tax system works. I find that my older clients, who have done their returns themselves, manually, before the advent of “Turbo Tax”, really have a much better understanding and are better to work with. The younger ones, more often than not, get mad when their refund isn't the same or more than last year! As if I have any control over that.

The rewarding part is working with clients who genuinely want to do the right thing, ask questions, and are receptive to advice. The other rewarding thing is when you find an error on a return that a prior CPA made, amend it, and the client ends up getting money back. This happened to me this year – to the tune of over $75,000 (domestic production activities deduction was missed – so I amended the past 3 years). That was a good day – too bad I can't bill like lawyers and charge him 40%!

Glad it's over and the summer “slow” season is upon us!

REG 11/28/11 - 88
BEC 04/04/12 - 88
FAR 07/23/12 - 90
AUD 11/2012 - 92

Yaeger/Wiley

[Anonymous]

Kricket….no doubt, I do several Pastor/Minister returns and I have to sometimes drag them kicking and screaming to introduce them to deductions they are entitled to. They err on the side of overly cautious.

The only reason I mentioned the Pastor aspect is that it involved a parsonage allowance. I hear of similar problems, especially with Doctors who form clubs it appears to make up deductions! 😀

Maybe I am just tired (okay I know that's so) but man I'm getting disappointed in people lately. Beyond that, I am disappointed in some of our fellow practitioners who just fill in the forms with numbers given. No, we're not supposed to audit the client information but when I hear that a school teacher is deducting their medical premiums on schedule A it gives rise to the question of “why?”. Now if the person is choosing to have their medical deducted post-tax (which is sometimes possible) then that might spawn a comparison to show them why doing it pre-tax would benefit them. In any event, it is worth double checking.

Oh well, enough belly aching. I'm tired and I am glad this season is over.

[Author]

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