Regret letter

[ILLMAS]

Can someone share a letter to get an idea how to nicely let go of a client(s).

Thanks

MAS

[jklcpa]

I've used the one from PPC that says basically these things:

I've enjoyed our relationship. I've reached the decision reluctantly and after substantial deliberation because of (pick one):

• cannot provide the level of services that you require
• growing conflict of interest
• unpaid fees, or continued failure to pay on a timely basis
• lost confidence in the integrity of company's management or data provided

Remind about any unpaid fees that cover services provided through (date). Include an invoice if possible, or make sure they are paid up before terminating.

Mention any steps the client needs to take that require attention (and list them to CYA).

Offer your cooperation to make a smooth transition with your successor, and indicate that client must send you a letter authorizing you to make disclosures.

[jklcpa]

Here's a link to one from the AICPA that you could paste onto your letterhead and customize: http://www.cpai.com/show-article?id=78

[mcb39]

I've used the one from PPC that says basically these things:

I've enjoyed our relationship. I've reached the decision reluctantly and after substantial deliberation because of (pick one):

• cannot provide the level of services that you require
• growing conflict of interest
• unpaid fees, or continued failure to pay on a timely basis
• lost confidence in the integrity of company's management or data provided

Remind about any unpaid fees that cover services provided through (date). Include an invoice if possible, or make sure they are paid up before terminating.

Mention any steps the client needs to take that require attention (and list them to CYA).

Offer your cooperation to make a smooth transition with your successor, and indicate that client must send you a letter authorizing you to make disclosures.

I had to do this last year and, believe me, one of the best things I ever did. I certainly did use some of the above suggestions. I also offered to help in any way that I could, and she took me up on it. Problem here was that it was my daughter-in-law's sister. She was one of my higher income business clients, but she wasted as much of my time as she possibly could. Good side is that her children and sisters all still come to me.

[Guest Taxed]

I have been lucky I guess that this season I did not have to fire anyone. But last year I had to fire 2 clients. One of them was easy because this fellow was always late in paying and had bounced 2 checks in the last couple of years. I put up with it before but finally I told him that he has to pay cash before I started on his return and if he did not agree with it we should part company and gave him the phone # of nearest HRB and Liberty where they may do a bank product etc.

The other client was a bit difficult to fire because she and her husband were in a bad marriage and they kept disagreeing on everything (ran MFJ/MFS report). For what they were paying me it was taking too much time and constant changes and the general unpleasantness.

In both situations, I spoke to them in person to let them know why I was no longer going to be doing their returns and the reason.

I followed up with an e-mail later.

Do you guys just send a letter firing a client or do you do a face to face meeting and then fire them.

PS. The fellow who I sent to HRB, his friend who was referred, is still with me at least for this season. Let's see if he comes next year.

[jklcpa]

In 17 years of having my own practice, I've only fired five. The other few clients that I lost were due to death, divorce where one party went elsewhere, or the client moved out of my area. Some that moved away have stayed on though.

Of the five, two were new clients that sat at my desk and asked me to cheat at the initial meeting, so I handed them their papers and escorted them to the door. Maybe I shouldn't really count those, as I never produced a return or any other work for them. The other three got the letter, two were consistent late payers/non payers. The last was a long-term individual return client that I was sorry to see go. I let her go because of a conflict of interest when one of my larger business clients split their business up and she became an owner of the competitor, the side that I no longer worked for. That last parting was on friendly terms.

[B. Jani]

I usually double the price and next year when call me for appointment, I tell them that price went up before setting up the appointment. Usually that takes care of it or come back, getting paid more.

[Guest Taxed]

>>> Of the five, two were new clients that sat at my desk and asked me to cheat at the initial meeting,

In 2009 or 10, I forget I got a call from a client to meet with a friend of her husband to do some partnership return. The taxpayers ( 2 couple) came to my office and within 10 minutes after talking to them I realized that they were paying many personal expenses as business expenses. These people were writing off complete vacations with their kids. When I questioned them, they got very defensive and told me they were paying me to do the return as they want it done not how I think they should run their business.

Obviously I refused to have any part of it, and then when they were leaving one of the fellows told me I am making a big mistake because they were willing to pay $900 the same that a local CPA quoted them. Fortunately I knew that CPA so I called him the next day and he had never heard of them.

I hate to think which tax preparer in my area took them as a client?

[MsTabbyKats]

I don't think "not accepting a client" is the same as "firing a client".

I get lots of:

1099-Misc....no estimates paid...people expecting a refund (?????) or to owe next to nothing. Before I start the return I warn them....and give them a rough (but larger than it will be) estimate of what I think they will owe....as a worse case scenario. If they freak out....I return the papers.

In general....if I think the person will be unhappy....I don't do the job.

As far as firing....I customize the parting e-mail. Many times I blame it on "software limitations" or "I cannot give your return the attention that it needs".

For non-payers (I only had 1 in 20 years) I would just ask for the $$$ upfront.

For people I had a problem with in the past....I state the issue....and let them know that I won't do the return again if "that issue" is involved.

But...for someone that I just don't like...a real PITA...if I couldn't think of an excuse, I'd raise the rate.

[jklcpa]

My two would have been fraudulent returns than being disappointed in the refund, or lack thereof.

# 1 was a couple that I had done their individual return for in the past, BUT then they came back this one year having opened some sort of café establishment in something like a farmer's market co-op type place. It supposedly had a few tables that required someone to wait on. They admitted that it was purely a cash business, were skimming, and paying someone under the table in cash to run it and wait the tables when they weren't there. They were planning to underreport the cash sales by the amount they paid the person, and thought that would be o.k. They were refusing to give me the gross sales and wage data, wanted no parts of filing payroll returns or paying employer's taxes, they had no business license...and the list would probably have gone on and on if I hadn't stopped the conversation. With their attitude and those issues, they were shown the door.

# 2 was a new client, expressed concerns about keeping the fee down. I told them that being disorganized would cost them more because I'd have to do more work, and they told me twice that they had it all organized and totaled. We had several detailed conversations on the phone before their scheduled appointment to aid in organizing and getting all that would be required. They were running a daycare out of their home (need I say more?), and when they finally showed up, they were toting one of those large paper grocery bags filled with unsorted receipts. They wanted to sort them into the expense categories with what would have been numerous piles all over my desk. It would have taken hours to go through all of that, and they thought if they did it that I wasn't going to charge them while they sat in my office?! AND they wanted to deduct their personal groceries and other things that weren't even related to the daycare, that they thought I was going to overlook or bury for them. I don't even remember all of the details now, there were too many negative issues with these people, they had to GO too!

[mcb39]

It would take too long to go into details in my case. I did not meet with her personally, but did exchange e=mail and phone conversations regarding the "deal-breaking" issue(s) before I wrote the final letter. I don't handle confrontations well and this was a difficult step to take. I do think that the fact that her children and siblings still remain my clients, speaks better for me than for her. I didn't make the decision lightly, but have never regretted it. I don't think that you have to let your clients control you in order to be a success in this business. (Guess which one of the Emoticons is me!!!)

[MsTabbyKats]

One of the beautiful things about "being the boss" is that you can pick & choose your clients.

When I worked in "the office" I had to do a lot of things that were either tedious or I was uncomfortable with (I let the boss sign those.......).

If I just "don't like someone" (I dumped a condescending client this summer.....DH thought I was stupid to do it....but I just couldn't take her attitude any longer) I won't do the return.

[Guest Taxed]

>>> AND they wanted to deduct their personal groceries

When I take a new Daycare client I discuss with them this aspect and tell them they should really use the standard day care food allowance figures for meals. This way you don't have to buy groceries using 2 separate receipts. In that line of business especially if you are running it out of your basement, you cant keep track if what your kids ate with the daycare kids?? I think IRS knows there is some abuse there.

[michaelmars]

A couple of years ago [when my kids were born] I dumped all the clients that made me cringe when they called. I decided to only deal with clients I liked. Hurt the wallet a bit but I was much happier. its amazing how 3-4 clients can keep you on edge.

You don't need to get into details, I just say I am taking my practice in a different direction.

[JJStephens]

I just did an extended return and for the third year in a row the client told me she wanted to claim the standard $500 deduction for personal gifts. For the third year in a row I told her (and showed her in the regs) that personal gifts are not deductible. She insists that all her friends take the deduction and is disappointed that she can't (not mortified that her friends did!).

I've been tempted to fire her but I've known her for about 25 years (long before she became a tax client) and find it entirely credible to believe she honestly does not remember the prior year conversation. In spite of being a highly educated professional person, she's not real strong on the whole memory thing when it comes to anything finance related! She does remember to send me a check so I guess I'll just bookmark the regs to show her again next year.

[kcjenkins]

Yes, as long as she accepts your "no" and keeps coming back, it's not a big thing, is it?

[JohnH]

Good point KC. If I fired clients who forget what I told them last year, I'd be down in the minus digits. I wouldn't even be able to prepare my own return, because I sometimes forget what I looked up last year on some issue and I find myself looking it up again.

[kcjenkins]

LOL Yes, I bet we all do that sometimes!

[Guest Taxed]

It's amazing how many taxpayers still think that state unemployment is tax free? Every year I get a few who will NOT tell me they collected some unemployment between jobs. Then when CP2000 arrives they are shocked even though my annual questionnaire clearly states to list unemployment received?

[SaraEA]

We are in the process of firing a number of PITA clients we just don't want anymore. Our letter will tell them that given the direction our practice is taking, we feel we can no longer give them the attention they deserve or otherwise meet their needs. We offer to supply any records their new preparer will need and wish them well. No specifics about why we hate them.

The clients we are dismissing don't pay reasonably promptly, piecemeal their data to us, call or stop in too often, or clearly are cooking their books, lying, cheating, etc. A few clients are on the fence and we might just double their rates rather than fire them. We did fire one big client this year face to face. He just demanded too much attention and got irate when no one returned his third call of the day within 10 minutes. He was so angry at us for not responding to his 22nd email of the week that he left willingly. It was a big account, but the peace that prevailed in the office after he was gone made us realize it was a good decision and we should make it more often.