Draft copies of returns and how to decline

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#1
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Client need them for a business loan and I got an email this morning asking me for draft copies. She gave me final return info, like PPP loan, truck purchase, yesterday at 4:30 PM. I've been working on this return for a while, while waiting for final info. I'm booked for part of the day and don't have a lot of time to finish it. I also feel uncomfortable giving a draft that goes to a lender ... which later may need to be adjusted by 10K or more. I need time to do research on the PPP loans, the truck bought ...What do others do? Do you give draft returns? This is a very complex return. If she really needs it, but then again I had to wait 3 days to get the final info.
 

#2
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I don't provide draft copies.
Say the final return is nearly complete, and/or stall.
 

#3
JAD  
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Absolutely not.

Dear client,

I received your request for a draft return. My liability insurance carrier's head would explode. I cannot issue an unfinished product upon which your lender would rely in making loan decisions. I just received information from you yesterday. I will turn my attention to your return immediately. If you respond promptly to any questions that arise, I expect that I will be able to provide you with returns on Wednesday.

Sincerely,

Andrew
 

#4
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Thank you! Very helpful,

I used the liability insurance explanation. to decline the draft.

Some more info on how a client can put you in a corner, not intentionally, of course, but this client apparently had a deadline with the lender for today .... which she never told me. I asked for her missing info on Monday, and she waited until late Thursday to give it to me. At 6 am this Friday morning, she emailed asking if I could do a draft return today.

I also told her that the new info takes time to put on the returns, balance sheet. I think her unverified expectation was that this it was as simple as adding a 1099-int.

It's never easy to say no to a client but saying "yes" could have meant problems for me. She was disappointed because she may not get the loan now. But she didn't communicate the deadline with me. I hope I won't loose the client over this and hopefully she realizes that not keeping me in the loop about the deadline and giving me the info late, was her doing.
 

#5
Frankly  
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She was disappointed because she may not get the loan now.

Baloney. She's throwing a guilt trip. Lender runs out of funds today? There's no deadline to get a loan.

I used the liability insurance explanation. to decline the draft.

Ah, the 'ol "insurance" excuse. Nobody believes that. Somebody's going to sue because an incomplete "draft" return was not accurate? Why not just tell the truth - you don't do half-baked tax returns.
 

#6
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Frankly wrote:
She was disappointed because she may not get the loan now.

Baloney. She's throwing a guilt trip. Lender runs out of funds today? There's no deadline to get a loan.

I used the liability insurance explanation. to decline the draft.

Ah, the 'ol "insurance" excuse. Nobody believes that. Somebody's going to sue because an incomplete "draft" return was not accurate? Why not just tell the truth - you don't do half-baked tax returns.


I use the insurance excuse a bot with TEXTS. I tell clients, i am not permitted to text tax info. It voids my E and O policy.


They seem to get it and dont text me.
 

#7
CathysTaxes  
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southparkcpa wrote:
Frankly wrote:
She was disappointed because she may not get the loan now.

Baloney. She's throwing a guilt trip. Lender runs out of funds today? There's no deadline to get a loan.

I used the liability insurance explanation. to decline the draft.

Ah, the 'ol "insurance" excuse. Nobody believes that. Somebody's going to sue because an incomplete "draft" return was not accurate? Why not just tell the truth - you don't do half-baked tax returns.


I use the insurance excuse a bot with TEXTS. I tell clients, i am not permitted to text tax info. It voids my E and O policy.


They seem to get it and dont text me.

I tell them to email so I have a record of the question and the response.
Cathy
CathysTaxes
 

#8
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Frankly wrote:
She was disappointed because she may not get the loan now.

Baloney. She's throwing a guilt trip. Lender runs out of funds today? There's no deadline to get a loan.

I used the liability insurance explanation. to decline the draft.

Ah, the 'ol "insurance" excuse. Nobody believes that. Somebody's going to sue because an incomplete "draft" return was not accurate? Why not just tell the truth - you don't do half-baked tax returns.


Agree with the guilt trip. And yes, I have never heard of a lender who had a deadline for a loan application before. However, this client told me that this is a hard money lender so maybe they can run out of money.

I think the liability insurance issue is actually a good point. I believe that that the insurance company will decline any coverage based on a draft return. So, yes, I don't think it's covered.
 

#9
JAD  
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I use the liability insurance thing any time someone wants me to do something that I am not comfortable with. I've never had any push back from my clients.
 

#10
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Andrew9901 wrote:Thank you! Very helpful,

It's never easy to say no to a client but saying "yes" could have meant problems for me. She was disappointed because she may not get the loan now. But she didn't communicate the deadline with me. I hope I won't loose the client over this and hopefully she realizes that not keeping me in the loop about the deadline and giving me the info late, was her doing.


The stress of longer tax seasons, dealing with tons of false IRS notices, and an uptick in more testy clients has taught me it's okay to lose clients I wouldn't have thought of losing before, and intentionally saying goodbye to clients who put me in stressful situations due to their own laziness or disorganization.
 


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