Motivating Laggard Clients

I charge by the form, not by the hour. How do I light a fire under the handful of clients I have who can't (after several months) deliver that last document or two I need to finish?

Nice clients I'd like to retain. Easy to work with, except for their protracted inability to deliver those last few documents.

Is this just an occupational hazard?

Taxpayer's on extension are generally slow to respond to document/information requests in my opinion. I set a hard deadline and if they can't meet that I charge extra or disengage. I am not going to have a heart attack because they were slow to deliver for me to finish my work.

Just last week I gave one of my clients a deadline to deliver by end of month otherwise the engagement is off!

The advice to not have a heart attack is sound.

Working with the public involves a few annoying clients. You can get rid of them, but there are always more to come.

Make it easy for them to provide what's needed: drop by no appointment needed, fax, e-mail attachment, portal, whatever. It's up to them; it's their tax situation; penalties and interest apply. They are in control, fires notwithstanding.

Ways you can assuage the annoyance: charge a retainer up front and/or add a few bucks to the bill. Be thankful they're not dropping off the last document April 14th. All is well. Relax. Avoid a heart attack.

I am dealing with one right now that has an S-Corp. 9/17 deadline, still waiting on information. Tired of phone tag and not getting what I need via e-mail, so I made him to agree to meet at his house tomorrow afternoon so we can go over issues that exist. I wanted to meet where the documents are located that I might need, not discuss while he is traveling in his car as he previously suggested. And yep, fees go up because I end up charging for my time in chasing down information.

OH, the joys of meeting a client at his house.

"Just a minute while I clear off the table."
Then yells at the dog to stop jumping up on me. Finally throws the dog out, where he promptly spies my car and pees on the tire.
The 2 year old interrupting every 45 seconds, finally climbing up into Daddy's lap.
"Now what was it you needed? A 1099? I should have that right heerre… (shuffle, shuffle)"
"Gee can I get that 1099 online? Let me go see..." (exits to the back room, comes back 5 minutes later with his laptop, but can't seem to get into the website)

The reason clients don't provide documents is they don't have them to give to you, and won't take the time to get them.

The reason clients don't provide documents is they don't have them to give to you, and won't take the time to get them.

While this is true in some cases, my experience overall is clients are horrific procrastinators and VERY, VERY few of them want to think about taxes, let alone PLANNING.

No heart attacks here. If I seem anxious I blame the 1 hour and 45 minutes of IRS Hold music I had streaming from my phone this morning.

If you have perpetual procrastinators, my suggestion is to increase their fees every year by a much higher percentage than the rest of your clients, until they decide to cooperate with you or go elsewhere.

I had one of these type about 5 years back and then when he could not bear the increase, he went elsewhere. Then one day i get a call from another CPA that I knew asking if this fellow was habitually late because he is ready to fire him and if I want him back

Exactly - don't be delighted to get a "new client" more than likely to be some other CPA's headache.
When they ask, "how much time do we have" I say "you are not the only one I have to finish, avoid the stampede, get
it in now - Pronto."

I need to give the client I am meeting today some benefit of doubt. His prior tax preparer really screwed him over in several areas, including by not releasing information pertinent to the returns and original docs even though the preparer is paid in full. I know the story is true, the preparer has done nothing but lie and I had to make numerous inquiries with the IRS to obtain information the preparer is otherwise obligated to provide to client. Old preparer is a cocky EA, not a CPA. I already had to use the first time filer abatement because of a significant error the EA made last year for 2016.

I had to make numerous inquiries with the IRS to obtain information the preparer is otherwise obligated to provide to client. Old preparer is a cocky EA, not a CPA.

Exactly what information would a preparer be required (by tax law) to provide to the client, other than any source documents provided to the preparer by the client in the first place?

Personally, I'd take a cocky old EA over a CPA, any day. EAs are the only federally licensed tax professionals with unlimited practice rights before the IRS.

I know some tax preparers do NOT give the depreciation or basis schedules/worksheets to the taxpayer when the relationship sours. This has been a challenge for me over the years with some new clients

I know some tax preparers do NOT give the depreciation or basis schedules/worksheets to the taxpayer when the relationship sours. This has been a challenge for me over the years with some new clients

I know plenty that do not provide depreciation schedules by default, regardless of client relationship status. I consider that highly unethical--it is basically attempting to hold a client hostage by forcing them to contact you if they wish to leave, or the client has the privilege of paying another individual to reconstruct depreciation and basis schedules from prior information that may be available.

makbo, I am not referring to preparer worksheets that do not become part of the filed tax return. I am referring to schedules filed with the tax returns that the preparer intentionally excludes from the client's copy. I do not provide copies of my worksheets used in the process of preparing a return, but EVERYTHING received by the government or tax agency is included in the copies I provide to clients.

As for this particular EA, apparently he needs a refresher of Circular 230. EA or CPA, if a client leaves, suck it up and behave professionally rather than acting petulant. Non-payment was never a factor.

makbo, I am not referring to preparer worksheets that do not become part of the filed tax return. I am referring to schedules filed with the tax returns that the preparer intentionally excludes from the client's copy.

Oh, then yes, of course a complete copy of the return as filed is due to the taxpayer at time of signing and filing. But that should have been dealt with at that time, not now that the taxpayer is leaving.

Oh, then yes, of course a complete copy of the return as filed is due to the taxpayer at time of signing and filing. But that should have been dealt with at that time, not now that the taxpayer is leaving.

True, but many taxpayers do not even know what is included in a complete tax return to be certain they have received a complete copy. Let's face it, they are not hiring us because they like to spend money. I have yet to acquire a new tax client whose prior preparer withheld filed schedules, and the client knew...as hard as I try to spend time reviewing tax returns with clients, their eyes gloss over and they basically say "I trust you, just show me where to sign."

Is it ok to tell a client if they don't get you the info you need by x date their return will be late?

Sure.

Regarding those comments about depreciation schedules, here is an except from the Texas State Board of Public Accountancy, Rule 501.76 regarding what items must be returned to the client. I would expect that all other states have similar rules?

Work papers which constitute client records include, but are not limited to:
(A) documents in lieu of books of original entry such as listings and distributions of cash receipts or cash disbursements;
(B) documents in lieu of general ledger or subsidiary ledgers, such as accounts receivable, job cost and equipment ledgers, or similar depreciation records;
(C) all adjusting and closing journal entries and supporting details when the supporting details are not fully set forth in the explanation of the journal entry; and
(D) consolidating or combining journal entries and documents and supporting detail in arriving at final figures incorporated in an end product such as financial statements or tax returns.

Since my clients are your typical small businesses, their books are kept on the tax basis. So I make sure to point out the detailed depreciation schedules that are provided with their tax return, because the GL is only going to show an entry for the total depreciation expense.

My presentation to them is divided into two packets - that which is actually filed with the IRS, then other supporting calculations for the numbers that appear on the return. I really don't understand why preparers don't want to provide the detailed info. Seems to me it shows some more of the work you had to do, which helps support the fee.

Is it ok to tell a client if they don't get you the info you need by x date their return will be late?

Yes. It's advisable to take it a step further and indicate potential penalties (and perhaps interest, if applicable) as a result of being late.

My presentation to them is divided into two packets - that which is actually filed with the IRS, then other supporting calculations for the numbers that appear on the return. I really don't understand why preparers don't want to provide the detailed info. Seems to me it shows some more of the work you had to do, which helps support the fee.

My experience has indicated just two potential reasons: 1) they are attempting to trap the client by forcing the client to make contact should the client want to go elsewhere and/or 2) to hide detail from client for incorrect preparation (dealing with this now with an EA).