"Training" clients to be OK with an extension.

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#1
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I took on too much business, and with each day I become further away from being able to file on time for many clients.

A 2020 tax year IRS postponement of the deadline is not a long term solution.

These clients "expect" that I will "hold their spots" for them (I've never promised any such thing - but they feel as if I'm obligated).

Please rate my "can" (Edited):


Dear Client,

I understand that you receive your tax documents after our ability to file without an extension and that this creates a stressful situation.

This is a problem that affects the clients of most established/in-demand CPA and EA firms and is very typical in the industry.

One option is that you can generally walk into a retail storefront and have your taxes completed within a few hours.

The other is to have us file an extension for you. The advantage of staying with us is having a tax practitioner who is more caring about your situation, generally more experienced, and more secure/careful in the way your data is handled. Handling your taxes is much more than just “transactional” to me.

If you wish to proceed, please continue with uploading your documents promptly and we will provide guidance accordingly.

Sincerely,
Last edited by ItDepends on 16-Mar-2021 2:01pm, edited 6 times in total.
 

#2
Taxaway  
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Boston, MA
ItDepends wrote:I understand that you receive your tax documents after our ability to file without an extension and that this creates a stressful situation. This certainly is not your fault.


First sentence seems a bit convoluted and parts of the letter sound like you're putting some blame on yourself, not what you want your clients to infer.

How about keeping is short, direct, along the line with these snippets:
"'we value each client and handle their tax situation with the expertise and attention it deserves, often that takes more time than expected...
"in this busy tax season we are unable to meet the filing deadline of every client if we do not receive your documents with enough advance time necessary...
--and perhaps pick a calendar date, send an email to any prior client yet to contact you, suggesting they request you file an extension for them.

I'm in a similar situation now with a (normally 2) 4 week turnaround! Hmmm, it's March 16 and some long-time clients who contact me late March thinking to show up for an office appt (or upload them) are in for a surprise. I'm blaming the pandemic! Remote tax prep is a much longer process.
 

#3
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Edited OP based on response, thanks.

Note that we already have told these clients that our turnaround time is 4-6 weeks and provided them with guidance on dates.

This response is designed for clients that get upset when they come in after that time even through we clearly disclaimed it.
 

#4
ATSMAN  
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I take slightly different business approach. If my client submitted all the tax documents on time then it is up to me to get the job done and file on time. I really can't make any excuses. I hire extra help and work 12 hours to get the job done.
 

#5
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I work 14 hours, 7 days for about 8 weeks. I don't mind because I like the money, to be honest.

I tell them all 6 weeks every year but they ignore that and act like I didn't tell them. It's also in every email we send, in the signature.

So it's not really on me.

But, understandably, 6 weeks is not always enough time between when they get the docs and "my" deadline.

Still, I don't want to lose them, I want to work through the 15th of May or so on retail 1040 returns.
 

#6
ATSMAN  
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Still, I don't want to lose them, I want to work through the 15th of May or so on retail 1040 returns.


Well you can't bite more than you can chew. I know my physical and workforce limitations.I routinely turn away business that I realistically can't handle in a compressed time. This year I rejected 2 LLC clients because 3/15 was less than 2 weeks away when they approached me. I like to make money too but I am not going to kill myself trying to make it :twisted:
 

#7
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Yeah... I took on too many and I am regretting it. Not that I mind working, but I don't want to fail to meet my commitments - which is happening to me right now. Lesson learned. I'm hoping they will not mind extensions, but many of them get upset about it.

I can finish the ones I took in up to today, but the return clients that engage the next week or two are now the one's who will be upset.

As if I "owe" them to hold a slot for them - which I have mixed feelings about whether I do or not.
 

#8
smtcpa  
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Richmond, VA
I generally take that approach but you can never predict the number of clients that decide to extend versus need to have it done earlier. My intake of existing clients is higher/earlier. And finding tax help at any time during the year let alone during tax season is pretty much impossible.

ATSMAN wrote:I take slightly different business approach. If my client submitted all the tax documents on time then it is up to me to get the job done and file on time. I really can't make any excuses. I hire extra help and work 12 hours to get the job done.
 

#9
smtcpa  
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I think you need to help ease their anxiety about extensions. I am a huge proponent of extensions. I have a 35% premium if they HAVE to have it done between 1/15 and 4/15 and we will be scheduling clients from Jan to Sept next year and many of those know they will get extended but it will cost less to prepare.

Anyway, this is what I have on my blog that I sent to clients last week. Many times once the client understands there are myths about extensions, they become much more amenable to extensions.

Dispelling the Myths of Filing Extensions For Your Tax Return

Every year we address client concerns about extending their tax returns. Over the years I’ve seen the media hype over the April 15 deadline like it is the final deadline and failure to file will cause problems. That is simply not true. I have counseled clients that it really is ok to file for an extension. Yes, there are some things to know, but extensions have benefits as well. We encourage extensions because it reduces stress for our clients and allows for the preparation of returns in a more relaxed, less deadline-driven environment which only has positive benefits for our clients.

As you know, the initial deadline to file your taxes is April 15th every year (March 15th for corporations and partnerships), unless that day falls on a weekend or holiday. For many, this causes panic especially for clients who are waiting on brokerage statements or K-1s from investments. But why? The April 15 date should not cause panic at all. The IRS grants an automatic extension until October 15. You don’t need a reason; you or your tax professional just need to file a one-page form requesting the automatic extension on or before April 15.

You should make a payment if you think you will owe to avoid late interest penalties and interest. But it is not necessary if you are ok paying a relatively small amount of penalties. Other than that, it is very simple and relieves stress.

Remember, the tax industry is notorious for tax professionals working 80-100 hour weeks. Do you really want your tax pro working on your return in a situation like that? I personally have extended my tax return for the last 20-plus years. Why? Because I can, and it helps me work on it when there is less stress. I think clients should do the same.

Here are some things I have heard over the years.

I Need A Good Reason to File For An Extension

Wrong. The IRS does not require a reason. In fact, there is nowhere on the form that allows you to plead your case, because you don’t have to and the IRS does not want to hear your reasons.

An Extension Increases My Chances of Being Audited by the IRS

I don’t know where this came from but it is simply is not true. There is no data supporting this fear. In fact, some have theorized that extending actually decreases audit risk because of the timing the IRS uses to select taxpayers for audit.

The Extension Process is Complicated

It is actually one of the easiest things we do. A click of the button and it is done. We get acceptances within a day, usually within an hour.

If I Extend, I Won’t File Until October.

The extended deadline to file is October 15th, but that doesn’t mean you can’t file April 16th or any time in between. We sometimes file extensions to give our client a day or two to sign their e-file forms. Or clients need it because they are waiting on a K-1 or some other information. The best reason is that it allows us to do a better job in a less stressful environment without the pressure of deadlines and hundreds of other clients.

Nobody else files extensions, I will be singled out.

To the contrary, millions of people file extensions for their business and personal returns. A reported 10 million individuals filed extensions last year. Personally, I have been extending my own business and personal returns for at least 20 years.

If you need to file for an extension, please contact us and let us help you walk through the process. It really is painless, and you will relieve unnecessary stress from your life.
 


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