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People think being an income tax preparer is all about possessing some super-human knowledge of the income tax code. It’s not. With the proper amount of continuing education and good computer software, you too could become a tax preparer. But to be a good one, you have to excel at customer service. You have to be accurate and thorough, you need to answer the phone and to be there for your customers.
Still, sometimes, I had to let a client go. You might ask, how can a business turn away paying customers. To explain my thinking on this, compare a financial advisor who charges his clients an assets under management (AUM) fee, with a tax preparer who charges a client according to the number of forms in the tax return.
Now compare me with a financial advisor who charges his clients an hourly fee for advice.
I have heard tax preparers joke about charging their clients by the pound; the more pages in the tax return the higher the fee. The truth about using a computer to do a tax return is that many of those forms are created with a single keystroke…. If even that.
I charged an hourly rate, making my fees a fraction of those other guys.
I like to use an analogy comparing McDonald’s to Ruths Chris Steakhouse. MickeyD’s sell many more burgers than Ruths Chris sells steaks. If the former loses a happy meal sale, it’s not as big a deal as the latter losing a filet mignon sale.
In my situation, I’m McDonald’s, if I have to send away a difficult client, the impact isn’t the same as a big shot accounting firm losing their biggest client.
There was the guy with 3 rental properties and two dozen limited partnership K1’s who perennially complained about my fee.
There was the client who neglected to provide records of all of his income. He argued that I should pay his additional taxes, interest, and penalties after the IRS caught up to him.
I fired them both, and eliminated the dread I felt before they came in,
A so-called friend who constantly talks about you behind your back, perhaps someone that violates your trust, maybe a “friend” who is only around in their time of need. People who always talk but never listen to you, or who fail to remember things that you may be struggling with.
Time grows more precious with each passing day. Sometimes it’s necessary to walk away from a one sided relationship.
My long-term accountant did my work, both personal and business. He told me he appreciated how I prepared what I gave him and over a period of more than 20 years he also told me some of his war stories. Such as the client who arrived on April 14 with several shoe boxes of receipts, etc. and then expected him to figure it out. He too hated to let a client go, but there were limits. He and I parted as friends when he retired for health reasons. I continue to use his firm to this day.
Some clients came to the office with dozens of not opened envelopes. I would hand them a letter opener and remind them that I charged the same hourly rate to open them up as I did to prepare the tax return.
I loved clients like you.
Be careful what you wish for. My accountant used to rave about how organised and complete my business and personal paperwork was. Unfortunately for him, I eventually realised I was already doing over 90% of the work myself. A short course, building on my admittedly long-in-the-tooth business and finance degree, got me to the stage where I could dispense with his services entirely.
100% true, Mark. With companies like FreeTaxUSA available, I’m surprised at the number of people who still use paid preparers. I also know that many people fear the big bad IRS, so paying someone soothes their fears.
Does Ireland have options for free tax software?