efiling of self prepared tax return

[Naveen Mohan from New York]

One lady called and showed up at my office. She had hand prepared "self-prepared" her return and she wanted me to just efile her return for her.

 

I told her that I need to redo her return in order for me to efile and I told her my fee will be $ 250.00. She got very upset. She said to me that she is a licensed attorney in New York State. she had done last six years of return herself and IRS has audited her for all those six years and they could not find anything wrong with her work. and that I should be ashamed of myself for trying to expand work to get extra money from her and here she was trying to support a local business. she works for Legal Aid Society of New York State so she expected me to charge similar to what she charges her legal aid client.

 

I tried to explain to her that every firm has a fee and that is my fee. She replied that I operate from my house so my fee should not be this high.

 

I could not make her understand that I could not efile without doing my data entry plus she did it with pen and paper, how do I even know her arithmetic was correct and also there was liability issue.

 

It was 1040 with two W-2, on simple schedule C, Form 8839 adoption credit form and New York State. I live in a rural part of New York State.

 

She finally walked out without even saying good bye or shaking my hand.

 

Was $ 250.00 fee quote out of line here? How do I avoid situation like this in future.

 

Thanks for your help.

 

Naveen Mohan

[Jack from Ohio]

Ignore her ignorance and sleep well.  She is trying to intimidate you.  I do NOT provide e-file service for self prepared returns.  It is just as much work as preparing it from scratch.  You are better off without her as a customer. 

 

Maybe you could call her and ask for some legal document or work at a seriously reduced price because you have looked up and researched all the information.

[kcjenkins]

No, Naveen, the fee you quoted is, if anything, low for a return with a Sch C, even without the Form 8839 adoption credit form and New York State return.  In AR, I normally set $300 as my MINIMUM for any Sch C.  And then when it's an attorney, there are some special issues of when income is recognized, when they should issue 8300s and/or 1099s, trust funds, etc.  Be glad this PITA client did not take you up on it.  

 

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Attorneys-Audit-Technique-Guide

[JohnH]

I agree with Jack and KC. This wasn't a matter of fee size - it was about control. She wanted to exert some control over you by setting your prices. If you had given in, then every future interaction you had with this no-class client would have been on her terms. Next thing you know, she would have been calling you demanding all sorts of favors, free tax consulting, or just wanting to brainstorm something with you. The fact that she engineered the conversation in the manner she did tells you all you need to know about her character. Besides, I don't believe her story about being audited six years in a row with no changes. There's more to this than she is telling you.

You can't avoid situations like this in the future, because there are plenty of ignorant loudmouths out there. Best thing to tell them is that you also do charity work, but you make the determination about who gets the charity and they don't fit the profile. You're much better off without her and people like her as a client.

[Lion EA]

I won't efile a return I haven't prepared.  But, if she insisted, I'd probably have quoted her a really high price so she would be the one to decide not to continue.  I think $250 is fair or low.  You're better off without a control freak.  Be relieved.

[jklcpa]

I'm with Lion in that I won't efile a return that I haven't prepared and agree with what the others here have posted. There's more going on with this woman and her return. Be glad she left your office.

 

If she had her return completed by hand without using a software program, she would have been exempt from the e-filing requirement in NY. Why didn't she just mail it herself?

[JohnH]

Good question. 

I think she wants a preparer's name on the return, probably with no questions asked.

And none of the reasons I can think of are positive.

 

Sadly, if she looks around long enough, she will find someone she can bully.

Hopefully their E&O coverage is good.

[jklcpa]

Exactly, John!

[JohnH]

I think we've answered Naveen unanimously, so I don't think I'm hijacking this thread.

The larger issue is the entire matter of clients who are in a hurry and need things done their way.

 

When I first entered this business and for many years thereafter, I saw this type of client as a challenge and an opportunity.  My thoughts ran along the lines that I would solve their problem, they would be impressed with my responsiveness & efficiency, and I'd have a client for life. I'd say that happened in maybe 5% of the cases I encountered.

 

For the remaining 95%, few of them cared beyond the initial grateful "Thank You's", and most really aren't impressed by our responsiveness - they just know that this appeals to our egos sometimes and so they use it to their advantage.  Looking back, more often than not there was some hidden agenda or undisclosed problem that came back and now it was my responsibility to fix it.  (Or at the least  I had to sweat it out for 3 years).  In one or two cases, when all the facts became known  it turned out to be a scary situation (another story for another day).  In any event, I learned by hard experience to resist EVERY request to do something quickly and/or on the client's terms. If they're in a big hurry or need things done to their specifications, then they need to find someone else.  Fees are a small part of this issue, but sometimes they even try to use the fees as a smokescreen to take your focus off the bigger problems.

 

If there's a legitimate need to do something with a quick turnaround or to accommodate the client, I think we are usually in an infinitely better position to judge than the client.  And when our instincts tell us to refuse to compromise (as did Naveen's in this case), we should definitely follow those instincts.  Based on my experience, I'm guessing there's only a 5% chance that our instincts are wrong.  Pretty good odds IMO.

[kcjenkins]

I totally agree.  One of the most unbelievable things she claimed was the "IRS has audited her for all those six years and they could not find anything wrong with her work."  NO ONE [except certain government officials, for legal reasons] gets audited 6 years in a row if the first 3 are 'no change' audits.  Indeed, normally two years of no change is enough to get the t/p a pass for several years.  No wonder Naveen's 'spider sense' was tingling.  

[SaraEA]

Send self-prepared clients to H&R Block.  Years ago when I worked there we would efile self-prepared returns for $100 (may be more now).  Preparers got an incentive payment if they were able to convert the taxpayer to a Block client (by pointing out things they missed, etc.).  They have a fee schedule in place for self-prepareds, trained preparers, and tons of E&O insurance.

 

We're now starting to send EITC clients to Block (unless it's a long-term client who just had a rotten year).  Their preparers, even the newbies, are well-trained in EITC, due diligence, record keeping, etc.  It's not worth the risk for us to do them.  And anyone who needs their return(s) done like yesterday gets sent there as well.  They have enough staffing to churn out 7 years of unfiled returns by next week during the height of tax season.

 

I know this sounds weird since so many in the profession love to bash Block and point out all the errors they've seen on HRB prepared returns.  But they do have excellent training and many competent, experienced people (and lots of E&O).  We advise the people we send there to ask for an EA or Senior Tax Advisor (if that's what they still call them) so they are sure to get a knowledgeable person.  Unfortunately they have too many new preparers who are allowed to returns they can't do that gives the chain a bad rap. When you think about it, they are well-situated to take the clients we don't want or don't have time for, and it's better to refer the taxpayer to someone else than to send them away with no clue as to how they can get the help they need.

[Catherine]

Some folks in our local EA society worked for HRB and they are terrific.  However, when I lived in Worcester (around the corner from one office) I saw some young women going in for their "how to prepare returns" classes in the fall -- in their Dunkin Donuts uniforms.  They can be great IF you can get a senior person.  'Round here, though, you have to take whoever is free.  I've made some good money fixing HRB problems.  Like not reporting 1099-MISC income but taking expenses on Sch A, or not reporting rental income (but again, taking expenses on Sch A).

[kcjenkins]

Ugg, reached my quota of 'Likes' for the day.  Nevertheless, I like your post, Cat.  

[Catherine]

Thanks, KC!