Paying (Gift) for Referrals

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#1
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845-NY
So this was my first full year in my "side practice".
I've had certain people who sent quite a bit of business my way this year.
I've always been of the school of taking care of those who take care of you.
Each person was directly responsible for in excess of $5k in billing, so I was going to get thank you/holiday cards with a note and $500 cash for each of these 5 people.
Anyone think this is too much? It's really just a token of my appreciation. I am sure no one expects it, and it's probably not necessary, but it's the thought that counts?
2 are local bookkeepers, 1 is a local CPA not taking on new clients, 1 is my lawyer (who I have referred a couple people to this year) and 1 is just a client/friend of mine.
 

#2
ATSMAN  
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2094
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31-May-2014 8:34pm
Location:
MA
I am sure you know the Gift rules, so I would not call it a gift unless you are sending $25 gift cards ( I do that). If you want to establish a referral program then it is a different matter. When I first started I was "thrown" a few clients each tax season by another CPA and I paid for those referral. 10% seems to be he going rate!
 

#3
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8286
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The Office
Five Ben Franklin's are better than three wise men. I'm sure they'll love it.
 

#4
cl2018  
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14-Dec-2018 10:38am
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United States
Does paying referral fee require disclosure in your state? As far as I understand, my state requires that. That is why I have not paid referral fee to someone who referred several clients to me. I feel disclosure the arrangement sounds awkward to clients. This has been a question mark in my mind though as to how everyone handles this. If no disclosure requirement, I definitely will pay the referral fee.
 


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