Discussion:Pissed off client and I want to ask others

He comes to me today; wants his stuff back to get another opinion. He has only paid me 475.00 in 2 years and his outstanding bill is 1616.00. So for all the above for the year 2006, it would cost him a grand total of 2091.00. He said that amounts to almost 200.00 per month and he thinks this is robbery!! He offered me 500.00; told him to take his money, take his books and leave. He asked me "why do I need bookkeeping if I have bank statements that show I am spending the money I take in"???? For tax returns I say. He truly thinks that he can just say I took in 100K; spent 110K and so I am getting a refund....

He may find someone in this town to do his work...most likely not but do you think my fee was outrageous? Maybe it was so I am doing the "did I charge too much" routine....just want an opinion.

Remember, It is better to be pissed off than to be pissed on.

I had a client do the same thing to me with a tax return. A $500 tax return and this guy started complaining. Told him to pay me what he thought it was worth and then to go elsewhere the next year. He paid me $45.

This past year, a client was angry cause he took $30,000 out of his retirement account and he didn't like the fact that he was now in the 28% bracket plus the 10% penalty and all that good stuff. I gave his stuff back although I did not give him the completed return.

Cheerio

When I get one of those, "Let me settle the whole thing for $X," comments it means they are going somewhere else and its best to take the cash and cut your losses. One accountant I do some per diem work for also makes sure he sends a 1099-C in January.

I sure like flat fees and engagement letters. That way, I don't surprise them with a bill and they (usually) don't surprise me by not paying. Engagement letters are a must for monthly work. I put flat fees in the letter for monthly write up, income tax return prep, quarterly and annual PR tax forms, and an hourly fee for stuff like answering notices.

Learned the hard way not to let them get ahead of me. I'll carry about $500 on receivables, but after that, I let them know in writing that they have to pay in full before I'll do any more work for them. Haven't lost one yet.

Sometimes I get so caught up with work that I forget to send a bill at all!!!! GAH!

Sending happy thoughts to you13:28, 11 October 2007 (CDT)~remember this guy has just freed up some of your time to take care of the GOOD client(s) that are coming your way :)

I don't do write up work, because I don't find it satisfying and don't want that kind of a practice.

I do have a new refund policy on my tax returns: if you are not happy with anything (color of the paper, smell of my office, etc.) bring back all copies of the unfiled return and you will receive a 100% refund. (Obviously if I have already efiled the return the clients have accepted my work, but they do have time to question anything before that). I also give them a firm quote (your fee will be between $300 and $350 based on the information I see here. If you drop off anything requiring more work, I'll call you with a revised fee quote before I do any more work) up front so that there are no surprises.

You could turn this into a competitive advantage by advertising it:

We have a "no surprises" fee policy. You will know up front the range that your fee will be based on the information you provide. We will call before doing any more work if it looks like there will be any adjustment necessary because of additional information provided by you.

I really do like to be kissed when I am being scr***d so I didn't accept his offer.

Thanks again!

My one criticism is why did you keep working for him after the first couple of months if he didn't pay you? Your fee is certainly reasonable.

With tax work, we generally don't release draft documents. We'll discuss the issues & numbers with the client, but no paper until the final document. Since we efile, we hold the filing until we get paid. With unfamiliar clients, we don't release the documents until we're paid.

We've only written off a couple invoices in the past 15 years. Get the cash up front!!!

We also have a standard letter from Gear-Up that we use that get's peoples attention...we inform them that unless we're paid we'll inform the IRS that we're no longer a paid preparer. Makes people think about audit potential...

Jim

the great thing about e-filing as opposed to the paper return is, we have more leverage. We can advise client that we will release the return for e-file after we receive pymt in full.

Will

"better to be pissed off than pissed on and I like being kissed when I am being f***ed"...hehehehe. Go ahead and make fun....I feel better venting now :)

I'll be a gentleman on the rest of it........... no kissing and telling........

Really, tho, do these people realize that the Code has over 26,000 cross references and is over 7,600 plus pages long? I know CPAs who have been practicing for over 35 years who still have occassion to say, "Oh, so that's how you're supposed to do it! Oops."

I had a client who wanted me to train his staff to use QuickBooks consistently and to write procedure manuals. I put in over 14 hours of work (at a meager $50/hr). He was thrilled with work but when he got my bill, I never heard from him again. And he was a friend of a friend.

I do progress billing now but would love to develop some value based prices. Anyone got any inexpensive resources to help me do this?

We've all got stories about the client that cashed in his 401(k) with out asking us, and he gets hit with the penelty. Or the people who don't know about the new charitable contribution record keeping rule. Lots of stuff to tell clients...

DZ is right, take the $500 and run.

Be sure to have clause in engagement letter that says invoices are due upon presentation and you may stop work without notice if client gets behind on their payment obligations for past services and that client will be responsible for any late penalties for any related late filings.

Now about the 1099-C....thank you. Never thought of it, but wow; I have about 5 clients who have never and will never pay me so guess what they are getting in 07?

)

By the way, I bet he owed some amount of tax and was surprised at the last moment by the bad news?

But no he did not know what he owed. He still owes from 2005 return but paid 1/2 of what he owed to them. He is the same client who had a live in gf that is illegal and she absconded a SS#....

Hope he comes knocking on someone else's door. If you are local and want his name, I shall surely pass it on....scum bag!!!

Regarding the 1099-C: [200235030] [6050P]

If you want to go that route you have to qualify as "any organization a significant trade or business of which is the lending of money"

I just had a client stiff me on a bill, I knew I should have taken a retainer, however I calmly stuck with it, and guess what, I got paid in full!

Good Luck TexCPA 15:00, 12 October 2007 (CDT)

I do like the idea of the 1099-C.

Lori_nj

Doesn't matter much to me; I have friends in this town; if he comes to them, hopefully he will get a stiff boot in the ass as I signed the last returns....

I trust ppl too much is my problem but I have learned from a few in 06 that in 07 I have taken a hard and fast approach.

He charges for his work...I charge for mine...his is tangible...he can touch the finished product; mine is so intangible that he does not understand. He will continue to be my neighbor/friend. He even asked me if he passes me on the street and waves will I respond? Sure...it is business...we shook hands...he has my word....but a 1099-C makes sense....he needs to learn he must pay for services or he gets none.....

The only thing I would have done differently is taken his money. $500 is $500. You're not getting anything else from him, so you might as well as taken it. jd

"Pride is the sign of a foolish man/woman." I don't know who said that, but I like it.

Best of luck.

You have a signed engagement letter stating your fees and you did the work. Use the small claims court to collect.

I haven't been on in a while. I do think we all have gotten clients like that at some point. Just from your posts and help with questions I've had, you were more than reasonable with him for all the work you did. I know it's hard not to take it personally, but don't. It's better not to have clients like that.

Date Taxpayers Name Address

RE: Fee for preparation of your 2000 U. S. Individual Federal Tax Return - $ Taxpayer SSN Spouse SSN

Dear

Pursuant to Section 10.34 of United States Treasury Department Circular Number 230, Title 31, Code of Federal Regulations, I prepared the above referenced Federal tax return in anticipation of payment for my services, and accordingly, signed the return as the PAID PREPARER.

As of this date, I have neither received payment from you nor have I received communication, written or oral, indicating your intent to pay the preparation fee.

I, therefore, will on (some date in reasonable future) notify the Internal Revenue Service of the inaccuracy in the reporting of PAID PREPARER information on the above referenced tax return. Your Attention to this very important matter is hereby requested and your prompt remittance of the ($ amt) is anticipated to be forthcoming.

Sincerely,

CC: U. S. Department of the Treasury, Internal Revenue Service, Examination Division DATE TO SEND

Good luch

Mike Dubin CPA

Now what happens when you get paid? You'll notify IRS to restate you to "paid preparer"?

I also not encourage retaining such clients as if they do this once what can you expect in the future?

Good luck

Mike Dubin CPA

IRS very likely does nothing with such a letter but file it away in some dead file. Exactly where is the additional revenue in their taking any action on such a letter?

client two, he was/is a dirtbag. He actually had his lawyer call me asking what this was all about. Was very funny actually. Lawyer tried arguiing with me saying client had invoice. I said yeah, but did it state anywhere on there that he actually paid me?

Haven't sent the letter yet, but I actually will be soon. Be interesting to see if anything actually happens.

Merry Christmas all

And no, that's not an unreasonable bill for the services you've provided.

This has been stated before but I will re-visit it again. In the state of Texas, to my understanding, it is a violation of our code of ethics as a CPA to do as suggested in the "letter". I would advise you to check your appropriate authority.