Your opinion please.

Two clients:

Client #1 every year receives a tax folder from their tax return preparer with a hard copy of their tax return on the right side of the folder and all of their source documents in a pocket on the left side of the folder.

Client #2 every year is supposed to download/print their tax return from their tax return preparer's portal.

So, in seven years time (we always tell our clients to keep tax returns for seven years), which client do you think will be able to produce their seven year old tax return and all of their source documents for the return?

Client #1, but that is not our issue. We make them available to clients and that is what matters. That is how I know most of my tax clients never even look at them because I would receive download notifications whenever a portal document was downloaded. Not sure if my new system will give download notifications but since I summarized end tax results in a secure e-mail, most never bothered looking at tax returns.

They lost them no matter what you do.

Two clients:

Client #1 every year receives a tax folder from their tax return preparer with a hard copy of their tax return on the right side of the folder and all of their source documents in a pocket on the left side of the folder.

Client #2 every year is supposed to download/print their tax return from their tax return preparer's portal.

So, in seven years time (we always tell our clients to keep tax returns for seven years), which client do you think will be able to produce their seven year old tax return and all of their source documents for the return?

Great question. I guess it depends on what side of the spectrum you're on. My clients can always go into the portal and pull a copy of their return. The one thing is, how many times does someone ask for you to forward a copy of their return to their banker, etc. after already receiving a copy of it physically? I guess there are ups and downsides to every situation. I'm more than happy to provide a paper copy if they'll pay for it. Toner, folders, additional time, envelopes, they all have cost associated with them that I don't want to eat just because.

I don't do paper copies to anyone anymore, except for 1 or 2 VERY elderly folks without computers.

Even if the client loses their pdf, I can re-send it in moments. But many of them can keep that download more easily than a file of papers.

Even better than re-creating a print-to-pdf file, I just resend them 'their' Dropbox link and password reminder, where I maintain six years of returns. Plenty of room on the clouds.

For those wanting me to send to a third party, I explain it's easier for them to do so, else a signed formal authorization from them to me is needed.

I'm reminded of a client who wanted a paper copy mailed (she was already given one initially) and when I said there was a service charge, her response "never mind, I have it somewhere in my filing cabinet."

They lost them no matter what you do.

That has been my experience as well. I do keep pdf of their tax return so I can e-mail them if they request it. They can only download the current return.

For some people, particularly younger individuals, it's a lot easier to misplace a physical folder than it is a file on a computer or in the cloud.

So it's really a case by case basis here IMO, and we might be comparing apples to oranges.

So, if our clients are now always losing/misplacing their tax returns and source documents no matter how we provide them, then I have to ask:

Why do clients think tax returns and source documents are so unimportant:

1) There have been so few audits for many years that clients are not concerned they will need the documents for that reason?

2) Tax return preparers have trained them to be dependent on our offices for their documents. We are now their document retention/filing system (yuck)?

3) With the strong move to paperless over the years, many clients don't think they need documents any more. I really have my doubts that clients are preserving their digital tax returns and documents every time they change computers, laptops, backup systems, etc.

I'd love to know you thoughts on this.

Why do clients think tax returns and source documents are so unimportant:

Because they've been accustomed to asking their tax professionals when they need them, and to their tax professionals not billing a convenience fee for the admin work.

About 2 years ago we instituted a fee for copies after the original had been provided. Amazingly, most clients could all of a sudden find their copy.

We disclaim in our agreement and upon delivery that we do not guarantee storage of their tax documents and that they should be sure to download and save a copy.

No one does, and they ask us for them when they need them.

We don't charge for this individually, but we already built this into our inclusive pricing - which kind of stinks for the few clients who actually save a digital copy because they are paying for a service that they don't need.

I feel that this approach serves most clients the best overall, and we have trained our admin to provide the copies very carefully and to watch out for things like divorce situations, etc, so it's not much of a time cost (our admin sometimes have to "find things to do" in the off-season anyway).