New Client - you can't be serious?

[BulldogTom]

Back in early February, a potential new client calls me and wants to see if I would be a good fit for him to prepare his taxes. We talked a little and it turns out they have a small s-corp. We set up a meeting and he and his wife come in to interview me. OK, so far so good.

They tell me the company books are in good shape and it is a small little business that she runs. CPA is charging them too much. He works, they have a sched A, nothing sounds like it is going to be too difficult. We set up an appointment for her to bring in her books and prior year tax returns the next week so I can get this going. She calls the day she is supposed to come in and says she has something to take care of for her business and won't be able to make it. No problem, just drop off your stuff and I will get started. She agrees to bring it in that week.

Then nothing. A whole month passes and nothing. I figure they went back to the CPA.

And last night I come into the office and here is a stack of papers from her. The S-Corp return is due on Monday. A sweet little note says she is so sorry this is late, but it should be no problem.

The books are a mess. They show negative AR, there are notations that expenses were not really paid until Jan 2010. The equity section of the balance sheet is a mess with loans and draws (s-corp - draws). The company has lost money every year.

Then I pull out last year's individual return. They are carrying forward NOL's, they have capital loss carryforwards and credit for AMT paid in prior years (from the Dot Com bust). He is using an office in the home for his work. They are depreciating travel trailers for his work on sch A, and they are pulling cash out of the retirement accounts to float the business. It looks like three loans on the home, but one may be on the S-corp books.

Simple little return. Yeah - right.

No, I am not going to tell them to go elsewhere. I am going to stay up every night and work through the weekend if I have to, but I will get this done. I need the clients. And yes, I will charge them less than the CPA so they come back.

Thanks for letting me vent.

Tom

Lodi, CA

[Lion EA]

File extensions. Make this your cash cow for the off-season. Don't slight your continuing clients for these procrastinators. Tell them your fee is X (the amount you're thinking that's less than the CPA) if and only if they go on extension this first year, complex and want to thoroughly explore their options and review prior returns and coordinate S with personal and blah and blah and blah, all said with a smile.

[TAXBILLY]

Be sure to get a retainer up front or you will be waiting for your money.

Seen this type of client too many times.

taxbilly

[JohnH]

Ditto.

File the extension & give yourself time to breathe.

Some of my biggest blunders have been hasty decisions under deadline pressure.

With an "S" corp, all the extension does is take Mar 15 off the table.

A side benefit of filing the extension involves the decision to set up a SEP. Filing on Mar 15 slams the window shut on that option, whereas filing the extension allows you and the client 6 months to decide whether the SEP might be a smart move. Why close out any options when you don't even know if they might be wise tax planning?

[rfassett]

I agree completely with the others. File extensions. If they are pushing NOL's there just is no need to punish yourself with this, unless you just have nothing else to do. But just as point of reference as to what others do, in my practice, March 1st is the deadline for in-coming info to have a corp return completed by March 15th. March 25th is the deadline for individuals. Any incoming information after those dates have a higher likelihood than not to be extended. And we tell the folks that at the beginning of the season when we do our pre-season appointment setting. And we remind them when they bring their stuff in after the deadlines. It is not a punitive thing, but rather a mechanism by which I can pretend to retain a semblance of sanity. We do extend quite afew returns, but the very, very vast majority of them are completed by the end of May. We do not sit on extensions waiting for the next deadline. That said, I work an average of 100 hours per week from the third week in January right through the fifteenth of April because I would rather not extend returns if it is in my power. Good luck!

[TAXBILLY]

>>That said, I work an average of 100 hours per week from the third week in January right through the fifteenth of April because I would rather not extend returns if it is in my power.<<

I used to think that way until I ended up in the hospital for six weeks due to physical and mental exhaustion ... not worth it.

taxbilly

[rfassett]

Wow - six weeks. I was thinking a nap would be nice. But six weeks? You must have been really pushing the envelope. I will not say that I have it figured out completely, but alot of it has to do with pacing oneself. I arise every morning at 4:30 and am in the office by 5:30. I eat breakfast while I am updating software and planning my day. I then work hard until noon and take a half hour for lunch - away from my desk. At 6:00 I change venues and go home and have supper and then work at the computer there by logging into my office system via gotomypc. So by 7:00 I am back to work and work until 10:00. That is my routine 7 days per week. On April 17th, I go to part-time and only put in about 50 hours per week on average. But I do understand what you are saying. One day, when the boy gets through school and when money is hay. That's the time things will come my way. On that great come and get it day. :)

[RitaB]

MY new client.

Dude calls, moved here (TN) from NY. Describes his crap, wants a quote. I tell him it sounds like around $200, but I do not give quotes on the phone, and I can tell him for sure when he drops off. He comes in, has more crap than I thought (they always do). I tell him $250.

He says, "Well, you told me on the phone $200."

Me: "Yeah, you have more than you told me on the phone, and I'll betcha a dollar to a donut that the guy in NY charged you over $400 for this."

New Client: "$450."

Are you kidding me?! The guy is loaded, he's already saving $200, and he's haggling?

Inquiry: Is that even how you spell "haggling"?

[kcjenkins]

Yeah, well, you know some people think if they don't haggle a bit the first time, they are going to be taken as a sucker. And everyone knows things cost less in TN than in NY, right?

Don't take it personal, just don't let him get away with it. He'll respect you more if you stand your ground.

[RitaB]

Yeah, well, you know some people think if they don't haggle a bit the first time, they are going to be taken as a sucker. And everyone knows things cost less in TN than in NY, right?

Don't take it personal, just don't let him get away with it. He'll respect you more if you stand your ground.

Yeah, I told him I was plenty busy, whatever you wanna do, but that's my charge. My little attitude also said, "Tick tock, dude." (But in a sweet TN way.)

[JohnH]

A lesson in haggling:

A young optometrist goes to work for an old pratitioner.

The old practitioner is training the young guy on how to talk to the customer about eyeglasses.

He says:

"Sit down with the patient directly across from you, look him straight in the eyes and say, 'Mr ___, you need glasses.'

He will say, 'OK, how much?'

Keep looking him in the eyes and you say 'Fifty dollars.'

If he doesn't blink, you say "For the lens.'

If he still doesn't blink, you say 'Each.' "

It works every time, but you've gotta be looking them in the eyes.

[TAXBILLY]

Wow - six weeks. I was thinking a nap would be nice. But six weeks? You must have been really pushing the envelope. I will not say that I have it figured out completely, but alot of it has to do with pacing oneself. I arise every morning at 4:30 and am in the office by 5:30. I eat breakfast while I am updating software and planning my day. I then work hard until noon and take a half hour for lunch - away from my desk. At 6:00 I change venues and go home and have supper and then work at the computer there by logging into my office system via gotomypc. So by 7:00 I am back to work and work until 10:00. That is my routine 7 days per week. On April 17th, I go to part-time and only put in about 50 hours per week on average. But I do understand what you are saying. One day, when the boy gets through school and when money is hay. That's the time things will come my way. On that great come and get it day.

That was about the pace I was going at. So you don't see your son very much. Not good. You don't relax even one day for four months? Not good. It's a good thing that you are a young man (I'm assuming).

taxbilly

[kcjenkins]

Those of us who have been in this business a long time have mostly figured out that it makes more sense to give ourselves an occasional 'day off' whether we need it or not.

And that extensions are not a bad thing, in fact, it's almost always those ones that you drive yourself the hardest to finish on a deadline that turn out to cause you problems later. It's when you are tired and rushed, that you are more liable to make the mistakes. I used to let clients make their procrastination my problem, but I've learned better. And if it actually does have to been done in a rush, for a court date, for example, then I let them know that they are going to have to pay extra for the rush job, and they always, in those cases, have to pay me BEFORE they get the work.

[rfassett]

Taxbilly, I did take the time to spend time with my son when it mattered. I was at all of his performances in whatever manner and at whatever time they took place. And I was home for him when it counted. I was the Dad that was there - always. He is now studying acting in NYC. Young man? I have not been called that by anyone other than my 75 year old Father In Law in a long, long time. The freedom is what makes this schedule possible. Understand, I do not intend to run this pace forever - just as long as it makes sense and as long as I enjoy it.