Questionable Clients

[Terry D EA]

I have a couple of clients that I am questioning my responses.

1. Client number 1, whom I have prepared several years of returns for, decides the y will use HRB online software to prepare their own return. No problem except they are calling me asking how to fill out the 8863 for the AOTC. They also wanted to know how many previous years the AOTC had been taken. I told them I could answer none of their questions. I only took the AOTC in one year for the parent. But, the client is well over 21 and I cannot discuss the parent's return. Right or wrong response.

2. Client number 2. Retains my services to prepare 2022, 2023 and 2024 returns both fed and state. Client owes each year with a very small refund in 2024. I have informed the client of the status of the returns, what the results are, and what they owe me. Of course, you guessed it, they have gone dark on me. I have sent one reminder and asked for them to contact me and received no response. The amount owed to me is north of $300.00. My take is I still want paid regardless of whether they ever finalize the returns or not. I did what they asked and it is now on them. I have never had to try and client from any clients in the last 28 years. How would anyone here proceed?

[BTS]

Client 1.  I get a few of these each year.  I do not help them prepare their own taxes.  90% come back.  I even get calls for help from people we have never done !!!  I just hang up.

Client 2   So these are new clients ?  If new and they do not respond after several attempts, then your probably out your time and money.  Drop them !!!   If prior clients and there has never been an issue in past years, maybe give them some time to respond.  

[kathyc2]

Client 1-  I wouldn't help them prepare form, but would tell them number of years claimed.  If you have concerns about confidentiality, email parent as to how many years claimed and they can pass it along.

Client 2- Try a different contact method.  If emailed, call.  If called, email.  

 

[Lee B]

You could send client # 2 a collection letter explaining that failure to pay will result in either taking them to Small Claims Court

or turning them over to a collection agency.  Years ago when I first started I lost $1,000 to a business client when i carried an outstanding balance due.

Last time I did that. Now business clients pay me every month and tax return clients pay me when they pick up the return.

[Terry D EA]

Update - Client #2 has contacted me and set up an appointment for next Saturday to pay and finalize. We'll see if it actually happens.

[Terry D EA]

20 hours ago, Lee B said:

You could send client # 2 a collection letter explaining that failure to pay will result in either taking them to Small Claims Court

or turning them over to a collection agency.  Years ago when I first started I lost $1,000 to a business client when i carried an outstanding balance due.

Last time I did that. Now business clients pay me every month and tax return clients pay me when they pick up the return.

It's a shame this stuff happens and probably has happened to all of us at least once. I agree and my businesses do pay me monthly as well and tax return clients pay when the return is picked up. Any resolution work, if I take any, requires a retainer upfront.

[Max W]

For No. 1, I would have sent him a copy of the instructions for form 8863. If that doesn't help, there is HTB's online helpline.

For the next time you have a No. 2 - get an upfront retainer and then have them pay as each return is finished.  If I can reasonably estimate what all three returns would cost, I offer a package deal with a 10% discount for prepayment.

 

[Catherine]

1. Tell them to check prior year returns, and count how many years the credit was claimed. You're not mommy or daddy, you owe them nothing. Especially how to circumvent paying you for a service while still getting service answers!

2. You can't force them to pay, nor withhold their documents - you can only withhold your work. I'd demand payment in full before I spend five minutes talking to them, unless they have a good reason for going dark. Like, away on vacation, illness in family, or similar. 

2a. This year for the first time I'm demanding pre-payment at last year's rate plus 5% from all clients, with adjustments for new complications or easier returns at completion. Spent way too long chasing just a handful of people last year (one lady stalled for seven months). At my billing rate it meant I did some of those returns for free (billable time lost chasing). Figured I'd have tons of pushback, and there has been none whatsoever.  New clients must pay in full before they get any e-file signature form put in front of them. Cash, check, credit card, PayPal, I don't care - as long I I don't have to chase them later.

[Lee B]

There is a growing shortage of Accountants and Tax Preparers. 

Ten of thousands of accounting/bookkeeping jobs are being outsourced to countries like The Philipines, India and South Africa.

 

 

[mcb39]

5 hours ago, Lee B said:

There is a growing shortage of Accountants and Tax Preparers. 

Ten of thousands of accounting/bookkeeping jobs are being outsourced to countries like The Philipines, India and South Africa.

 

 

Yikes!!!!

[Max W]

9 hours ago, Lee B said:

There is a growing shortage of Accountants and Tax Preparers. 

Ten of thousands of accounting/bookkeeping jobs are being outsourced to countries like The Philipines, India and South Africa.

 

 

you can get a bookkeeper in India for $5/hr

[Catherine]

15 hours ago, Max W said:

you can get a bookkeeper in India for $5/hr

And you get work that is worth about $5/hr, for the most part.

[Terry D EA]

 I think there is a trend here with outsourcing to India. Back when I bought the Gleim EA study course, Gleim setup discussion groups which was and wasn't helpful. At the time I had at least 20 years tax prep experience and passed everything the first time. My point is there were a number of folks from india and other countries in the group. Some admitted to never preparing a tax return but taking classes to be an EA. I guess because you have EA at the end of your name doesn't mean you know squat.  Kinda scares me.

[Catherine]

54 minutes ago, Terry D EA said:

I guess because you have EA at the end of your name doesn't mean you know squat.  Kinda scares me.

Same goes for CPA, and even MD. Knowledge does not equal alphabet salad after one's name, and alphabet salad does not equal knowledge.