Just Wondering What Others Would Do

[Terry D EA]

Client picked up their tax return today. This return would not be the easiest return one could do and  would never take a return like this to the tax mill companies. These folks have owed each year due to a spousal taxable grant situation that has no withholdings and due to the nature of the grant, it is taxable to Federal and NC State. For 2015, grant funds increased by 8,000.00. TP income also increase by 30K. They paid estimated tax payments based on 2014 and didn't notify me the grant funds nor the income by the TP had increased so we could adjust the estimated payments. Now, the spouse wants a second opinion because she just can't believe they owe what they owe and wants to take my return and get a second opinion. I assured the TP this wasn't a problem and that I was 100% confident in the return that I prepared from the docs they provided and that she was welcome to get a second opinion. I asked to be paid which they did. I also offered a full refund if my return was incorrect or that I missed something. Also, I stated that I would issue the refund after I was afforded the opportunity to review the second opinion. What would others have done in  this situation? Opinions please.

The return is on-hold until I hear from them.

[Yardley CPA]

The return is on hold?  Meaning you are not E-filing it until you hear from them?

I think your approach is a good one.  Any client can take a return and have a second opinion.  You stood by your return and you offered them a refund should something turn up as incorrect.  What more can you do?  If they are a good client and someone you've enjoyed working with in the past, then don't give it much more thought (yea, easy for me to say, I know) and hopefully they return next year.  If they do, great.  If they don't, so be it. 

When I give my clients their packet of information, including an estimate for the following year, I always mention, if anything changes during the year...you win the lottery, you get a huge pay increase...etc, please contact me so we can determine if our tax planning remains on target. 

Terry...please let us know how this turns out. 

 

 

 

[Terry D EA]

Thanks Yardley CPA and I will let everyone know the outcome. Last year, I had several clients who were using up my Kleenex's when they found out what they owed. I did offer of the estimates and have explained how tax planning is paramount in our current times. Even with all the changes in NC that is costing everyone and with the affect of the ACA, none of those folks have taken me up on the planning offer. They hate "I told you so and to call me but you didn't" This is the exact case. I have a Sch C client who I have asked three or four times to allow me to run estimates so they can make the estimated payments and reduce the paid in April. You guessed it, no contact. The guy owes 15K this year plus penalties, go figure. If I held my breath each time someone said, "great idea I'll contact you in June" I would have been dead long ago.

Yes the return is on hold meaning it is not transmitted and I agreed not to do so until I hear from them. There is a marker in my software that I use that I label the return status. Helps me remember.

[SFA]

I feel for you Terry. You knocked yourself out to nail that tax return and the clients just think that it was data entry work. Surely someone else can enter the same data and come up with a better answer. Abracadabra!! Wow!!! Wouldn't that be great.

Keep moving on and see how quickly they disappear in the rear view mirror. Next.

 

[MsTabbyKats]

When I had clients who were sure the only reason they owed was because I made a mistake I would tell them to go anywhere else...and, if with the same information, the results were different, I'd issue a refund.

I never had to give a refund.

When you review, make sure the facts haven't changed.

[Jack from Ohio]

Fire them immediately. 

[BHoffman]

There would be no way.  I wouldn't fork over a tax return to a client so that he can take it to another accountant to be reviewed.  Either they trust my work or they don't.  Any tax preparer can "find more deductions".   If the client is shopping for a lower tax bill, then they can do it without starting with my work.  Let them start from scratch with the original documents and see what some other accountant comes up with.

Although, you said they paid you so I guess after that the return belongs to them and they can do whatever they want with it. 

 

[Terry D EA]

You are correct, they can do with it whatever they want. The other tax preparer must provide them with the reason(s) their return or balance due is less. If those reasons are due to anything other than a calculation error or entry error, I have the right to review prior to issuing a refund. If they present other documents, then so sad too bad. I feel very confident I will get a call telling me to transmit the return. This guy's wife complained last year and I was right so I am not worried or the least bit concerned this year. If I did, and I doubt it, make a mistake, I am man enough to take my lumps and fix it.

[BHoffman]

Now the theme song from "Leave it to Beaver" is stuck in my head because I'm thinking about Lumpy Rutherford.

[BHoffman]

[rfassett]

Terry - I was in agreement with what you did up to offering the refund.  I fully expect to get paid for whatever work I do. If I do gratis work, it is MY call, not because I felt some sort of coercion.  You did the best job you could based on the facts presented - and you should be compensated for that.  I have no issue what so ever with my clients getting a second opinion.  They have every right to do that.  But I stand by my work and expect to be compensated for it  If I have made a mistake, though, with the facts presented, I will make the fix free of charge.  But I will not refund the money they paid me.

[MsTabbyKats]

59 minutes ago, rfassett said:

Terry - I was in agreement with what you did up to offering the refund.  I fully expect to get paid for whatever work I do. If I do gratis work, it is MY call, not because I felt some sort of coercion.  You did the best job you could based on the facts presented - and you should be compensated for that.  I have no issue what so ever with my clients getting a second opinion.  They have every right to do that.  But I stand by my work and expect to be compensated for it  If I have made a mistake, though, with the facts presented, I will make the fix free of charge.  But I will not refund the money they paid me.

Terry said he'd give a refund IF he was incorrect or missed something......not if the new preparer used other criteria.  Anyone who has confidence if their work should do this.  And anyone who isn't happy with the results should be able to get a second opinion.

As long as the first preparer is paid...let the client spend more money and feel comfortable.

I already said I used to do this and at times I would suggest it.  When I suggested it, the clients knew I stood behind my work and I wasn't afraid of criticism.

You're doing the right thing, Terry.

 

 

[RitaB]

I think you handled it perfectly, Terry.  We are entitled to be paid for correct work.  And the client is entitled to a second opinion.  And gracious wins with most people. 

[Catherine]

The only piece I would add is to go over the "compare" sheet.  If you can show the client how much more income, sometimes that pacifies them.  

[Terry D EA]

4 hours ago, Catherine said:

The only piece I would add is to go over the "compare" sheet.  If you can show the client how much more income, sometimes that pacifies them.  

Did exactly that. The The TP said he had no problems but it is his wife that is questioning everything. I even gave him a year over year comparison to show her. So, it's his problem now.

[Catherine]

1 hour ago, Terry D said:

Did exactly that. The The TP said he had no problems but it is his wife that is questioning everything. I even gave him a year over year comparison to show her. So, it's his problem now.

And he's got a bigger problem than the tax due if his wife cannot comprehend that a larger income - without extra tax paid in - leads to a large balance due.

[Roberts]

I think you did the right thing Terry. Doesn't always feel that way when the client is throwing a fit and making accusations.

 

Told friends they owed $6,400 and the wife threw a fit. The husband pointed at the 1040ES coupons I gave them and they didn't pay and said "it is what it is and it isn't his fault". Didn't make the wife feel any better. A lot of people have a disconnect that if you have a W2, somehow you should never owe taxes. When you earn $200k and only withhold 9% to taxes - that disconnect is going to be a problem.

[kcjenkins]

Some battles can not be won, and a client who chooses to ignore reality is one of those.

[Cathy]

Terry,

You did everything humanly possible.  The problem is the spouse and not you!  If they don't return next year it will probably due to embarassment from the husband to face you again with his wife in tow......and ditto on what KC just posted!

[Terry D EA]

I bumped this back up as someone in the thread asked me to post the outcome of this situation. Well here it is, the client TP called this evening and made an appointment to sign the 8879 and provide bank account info for the State refund. Apparently, they had no luck at finding someone who could do any better with their return. As I said earlier, I stand behind my returns 100%. I arrogantly admit that I knew this would happen so I guess they will be back next year.

[Jack from Ohio]

2 hours ago, Terry D said:

I bumped this back up as someone in the thread asked me to post the outcome of this situation. Well here it is, the client TP called this evening and made an appointment to sign the 8879 and provide bank account info for the State refund. Apparently, they had no luck at finding someone who could do any better with their return. As I said earlier, I stand behind my returns 100%. I arrogantly admit that I knew this would happen so I guess they will be back next year.

With a significant fee increase??  You are worth it!

[RitaB]

11 hours ago, Terry D said:

I bumped this back up as someone in the thread asked me to post the outcome of this situation. Well here it is, the client TP called this evening and made an appointment to sign the 8879 and provide bank account info for the State refund. Apparently, they had no luck at finding someone who could do any better with their return. As I said earlier, I stand behind my returns 100%. I arrogantly admit that I knew this would happen so I guess they will be back next year.

Good for you, Terry!  It shows a lot of maturity on your part that you realize that people sometimes freak out a little when they see an amount due on a tax return and they were not expecting it.  If you want to keep the client, continue with business as usual.  If you want to lose him in 2017 you can do what Jack said.

[Gail in Virginia]

Actually, if they took the same information to someone with less knowledge instead of taking the return to be checked, they may have gotten a worse answer.  I am glad they actually admitted that you were right - some clients won't do that if they go this far in questioning the preparer. 

[Possi]

You got paid for your work before they picked it up. Grace wins!