I am so burned up about yesterday’s post. How can my tags be saved and posted when my actual post did not? And I always add my tags last. I do offer a challenge to anyone who can create an epic story of what my post may have been based yesterday’s post title and the tags. May the odds be ever in your favor.
Yesterday and today we started preparing taxes. This week people have been coming in and dropping their tax information off for us. This is the time of year when we decide if we want to make changes to how we present the tax returns and if we will change our billing rates. This year we are adding a watermark across the returns reading “Client Copy”. What we wish we could put there is “This is your Copy. Do not lose this. We will charge you $25 for another one. Do not be upset when we charge you $25.” Unfortunately that will not fit.
Prior to 2013 we would bill our clients based on what Dad thought we should charge people. So people were billed based on a variety of factors such as how long it felt for us to complete the return, how many times we had to call the client with questions, if they were having a hard time financially, did they call us or stop by the office every day between the time they drop their tax information off and when they finally received their refund, or if they brought us cookies for Christmas. Surprisingly we found we were severely undercharging for our services based on the local competition.
So last year we started billing our clients based on what tax form were filed for that client. We decided how much to charge per form based on what our competitors were and we generally shaved $10-$50 off that, depending on the form. It resulted in us charging our clients anywhere between $50 and $500 more than we had the year before. Keep in mind, this new price is still significantly cheaper than our competitors. Now, for the people who’s return was now $500 more than the year before with no form changes we would discount, but on the bill the client could still see what their return would have been before the discount.
This year’s big dilemma is what to charge our students. In previous year would would charge high school and college students only $25 for their returns. Call it a student discount if you will. A lot of them were working to put themselves through school and generally we do their parent’s returns as well.
We have seen though that most of these students stop coming to us once they graduate from college. So it begs the question, “What’s the point?” It is especially bothersome when the student graduates in May, starts their new job, file elsewhere and claim themselves as a dependent, when technically the parents who are still supporting them to a certain degree should be claiming them. So then we have to mail in the parent’s return and the parents have their kids bring their tax turn into us so we can amend their return so they are no longer claiming themselves. It is a huge hassle. Especially since before we did not charge for amended returns. Guess what? We are now.
We also never used to charge for representing the client when the IRS sends their “love letters”. It takes time to figure out what in the world the IRS is talking about, write the letter, and then mail it in and deal with whatever response the IRS sends back. We did not have a problem doing this a few years ago when out of the 1,000 clients we had the IRS would only send letters to maybe five of them. But now the IRS appears to be sending random letters demanding more money to about 100 or more of our clients every year. We could have a person work full-time though the year just to answer and deal with these stupid letters.
Last week the IRS sent a letter to one of our payroll, bookkeeping, and tax clients. In fact, they are our biggest client. They are also a corporation, which does not require 1099’s to be sent to them. There is not even a place on a corporate tax return for 1099’s to be entered. But people are dumb and send them anyways. And we just double-check that they amount they say they paid to this client is right in the client’s books and we are good.
Well the IRS send a letter stating that this client did not report over a four million in revenue based on the 1099’s the IRS received. 1099’s that do not even have a place to be reported on a corporate tax return!
You can only imagine the letter we wish we could write to the IRS in response. It would go something like this:
“Dear IRS,
We have serious concerns as to education and intelligence of the agent who has billed my corporate client 1.8 million in overdue taxes, penalties, and interest based on the 1099’s that were received. We suggest this agent be instructed to complete 1,000 hours of corporate tax continuing education in light of this severe failure to correctly apply a well-known tax law. We also suggested that those hours be unpaid training.
In the future we would appreciate it if these incompetent agents were in data processing while true professionals are reviewing tax returns.”
But alas, we cannot send the IRS this letter or more trouble would most likely be coming our way. But a girl to dream.
Speaking of which, I am going to go do just that right now.
P.S. Here’s to hoping this post actually makes it to my blog.
The Girl with the Golf Clubs 