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Discussion:How to drop Prior Year Tax Prep Clients

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Discussion Forum Index --> Business Growth Community --> How to drop Prior Year Tax Prep Clients


JAInVA (talk|edits) said:

31 January 2013
In 2012 I gained two new Tax Preparation clients and had one couple who are long term clients who were absolutely frustrating to deal with. My only professional involvement with them was to prepare their Federal and State tax returns. I truely feel they are not worth dealing with this year. One of my CPA friends sent me an example of a letter she sent out to clients she did not wish to continue working with. She went so far as to provide contact information for an alternative Tax Preparer. I was curious as to how others have handled this. Do you just not send them an engagement letter? I want to be as professional as possible but I don't want to spend time finding another Preparer willing to take on these people. If I send a letter explaining that my workload is such I am not providing Tax Prep services for them this year, is it okay to not provide contact information for another Preparer? How do I handle the fact they will know I am doing returns for other people, just not them? I feel that is none of their concern and have no problem saying so, but I really do want to be civil if firm.

Ckenefick (talk|edits) said:

31 January 2013
Keep it short and sweet. "Thank you for your business this past year. It is greatly appreciated. However, we have made business decision to no longer handle your account. As such, you will need to find a new tax preparer to prepare your 2012 tax returns. If you have any questions, or need copies of your prior year returns, please contact us at 1-800-SEE-YA!!."

Fr. Mackelhenry (talk|edits) said:

31 January 2013
is it okay to not provide contact information for another Preparer?

No. Don't do that. They are not in the first grade, they can find another preparer on their own. When a sinner wants to leave my church, I let him go. If he ends up at some backwoods church it's his problem.

How do I handle the fact they will know I am doing returns for other people...

They won't ask, but if they do tell them that you are under a long term contract with these other people. Strike that, you can't do that. Just don't tell them anything; all their neighbors know they are a pain in the fanny too. Dump them now so they can find another sucker to do their taxes. Even a gardener prunes his bushes.

Bracket Creep (talk|edits) said:

31 January 2013
I agree with Chris. Keep it simple, short, and sweet.

"Dear Mr. Ahole:

Every firm has certain minimum standards that they expect from their clients. Frankly, you don't meet ours, so we will no longer provide you with any service.

I am not providing any recommendations as to other tax professionals whom to refer you to, as I wouldn't wish you on my worst enemy.

Have a blessed day."

HowardS (talk|edits) said:

31 January 2013
You have been voted off the island.

Fsteincpa (talk|edits) said:

31 January 2013
Or, instead of firing them, send them a letter that you their fee will be increasing this year. Make it a fee that makes you smile when you hear from them. Every PITA client has a fee high enough that they are actually people you want to see walk in the door.

One guy kept calling to ask me questions and then he would call ten minutes later to ask my staff if I got the message. That year, his bill was $600 for what is normally a $350 return. He asked why, I told him that I do enjoy him as a client, but he is a PITA and that every time he calls, he gets billed. That by disrupting my staff, it costs me money, therefore it becomes a billable call. I also told him that I return calls twice a day during tax season and by waiting, his fee will go back to what it was before.

Sticker shock retrained his calling patterns. Still a client to this day. Although, every other 3 years or so, he needs a reminder.

JR1 (talk|edits) said:

January 31, 2013
I use what Chris uses (ckenefick). Short, no excuses or reasons. At times, I try radically increasing the fees to the point where it is worthwhile, if that's possible. They pick.

Doug M (talk|edits) said:

31 January 2013
Don't put other tax preparer's names in your letter.

Just mention that if they need assistance in finding a new preparer, you would be more than welcome to provide some names to them.

They will never call. If they do, give them the name of the local EA chapter or state society.

STG (talk|edits) said:

31 January 2013
Fred hit the nail on the head - everyone has a price, including you.

It's the same principle when you get too busy in your office. Hire new people, or charge more until your clientelle drops to a reasonable level.

Fr. Mackelhenry (talk|edits) said:

31 January 2013
If you work for yourself, always try to have a silent partner. You don't need another office. Just have a hole knocked in the wall and install a door with a name tag (Mr. Granger, CPA) and just keep the door locked. If anyone asks you about your partner tell them he's a real workhorse, nose to the grindstone type of guy, and he never comes out of his office while he's at work. Comes in early, leaves late.

You can use your partner to pass on all kinds of unpleasant news: late payments to vendors, blame it on partner; firing clients, again partner; raise your fees, partner says so. You get the idea. Blame the bad stuff on the partner.

I learned this in priest school. When I have to pass on bad news to a parishioner (like they are going to hell, or whatever) I point to the sky and say, "It's not me, it's him." This takes the heat off of me and I can go to the supermarket without getting my car egged.

PollyAdler (talk|edits) said:

31 January 2013
If you shop the Salvation Army Thrift Store regularly you can usually find a nice oil painting of a deceased executive that a company or spouse has given away. Out with the old, in with the new, as they say. I bought one for $15.00, and had a new nameplate put on it, and hung it in my waiting room and the man has taken on a second life as my silent partner. "Mr Stanley" was the name I picked for him. He has an "office" as the good Father recommended, and I also have this painting to show the clients should they get nosey and ask questions. "He comes in early and he leaves late. Hard nosed workhorse."

CrowCPA (talk|edits) said:

31 January 2013
I would love to send the letter the Bracket Creep suggests but I lack the guts to do so. I send a more conventional communication as has been suggested by several others above. What I also do is enclose any depreciation schedules or other documents that a successor accountant may need. It makes you look helpful.

STG (talk|edits) said:

31 January 2013
Send him to me. Tell him I'm not very good, but I am really expensive.

STG (talk|edits) said:

31 January 2013
I charge $4/minute if I'm talking and $16/min if the client's talking. Surcharge of $13/min if I can hear a child, $44/min if I see one.

Zokan (talk|edits) said:

31 January 2013
If you decide to refer them to another preparer, refer them to a preparer you don't like!

While we have enjoyed having you as a client (preparer you don't like) specializes in preparing returns for tax payers in your situation.

ZL28 (talk|edits) said:

1 February 2013
i used to work for this guy and he would tell them he is only handling business client and accordingly they

need to find a new preparer for their individual taxes.

Douglasholbrook (talk|edits) said:

1 February 2013
Isn't this the kind of thing to have your liability insurer handle, or at least review? It would seem to be the kind of thing they see everyday and would know of pitfalls that we don't.

Alaskacpa (talk|edits) said:

1 February 2013
I used to employ the "increase the fee until I like this client" method and then realized no fee is worth dealing with a PITA client.

So I started dumping those clients with a nicely worded letter.... and low and behold I had more time to get the kind of business I wanted and the fees are way higher than the PITA client's would have been and I enjoy working with these people.

Eventually I hope to have my entire practice comprised of these type of clients. It will take a little while but if I weed the bad apples out each year I will get there.

Taxea (talk|edits) said:

1 February 2013
"no fee is worth dealing with a PITA client". I fire him with a Dear John Letter and cross him off my client list. Let him find his own new preparer. I also will not take back a client who has left after several years because it was more important to pay less for a return than to be comfortable that it is done right.

Fsteincpa (talk|edits) said:

1 February 2013
I can set a fee that makes it worth while. The key being setting it high enough that the client wants to leave and should they not leave, you are extremely happy.

Taxea (talk|edits) said:

1 February 2013
Fs I would rather just be rid of this type of client. Sometimes in business you have to do things that may not make others happy. I am happy enough sending the TP a Dear John. Don't you find this a bit unethical. I think I would look at myself in an unkind light if I charged a "jerk" fee. Just my opinion.

Taxea (talk|edits) said:

1 February 2013
Fs I would rather just be rid of this type of client. Sometimes in business you have to do things that may not make others happy. I am happy enough sending the TP a Dear John. Don't you find this a bit unethical. I certainly have no problem with charging for the extra work/time caused but, I think I would look at myself in an unkind light if I charged a "jerk" fee. Just my opinion.

Tonymontana (talk|edits) said:

1 February 2013
I vote for the fee increase with rules.

Rules like: No speaking unless spoken to. Raise your hand before asking a question. Don't look me in the eye when speaking to me. Do not sit unless given permission. The goal is to turn the tables and become such an expensive PITA that they'll just leave on their own.

I also have what's called a reminder fee. I use it when a client keeps asking for a copy of their tax return. They always seem to remember where it is after I tell them about the fee. The first time it's free, after that I employ the reminder fee.

Fsteincpa (talk|edits) said:

1 February 2013
It is not unethical. It's different if you just dislike the person vs them being a PITA. A PITA usually requires additional time and hand holding and I will charge for that. I will let them know that their is an annoyance fee if they ask. The point being is that I wouldn't care if they left.

The one guy I mentioned up above, he was horrendous that year, but he's one of my best clients. Another client who managed truckers, she would come in and be very demanding of the staff. I had to pull her aside every couple of months and tell her she can't treat my girls as she does the truck drivers. She didn't realize it and would apologize profusely. She has referred many businesses my way over the years.

Both of these clients would be considered great candidates for cya later, but I prefer behavior modification to that. Believe me, had the trucker lady given me attitude when I mentioned that, she would have been gone, but she is still here and a great client.

Doug M (talk|edits) said:

1 February 2013
I am going to take the other side of the fence.

The aspect I hate about our profession is to "bill out" the clients we don't like.

It probably in violation of your own engagement letter.

Ethically, you should tell them up front of your fee increase. If they come back, great, it is under your rules.

Fsteincpa (talk|edits) said:

1 February 2013
We specifically state that our fees are a function of both form and time involved. If some of that time is agonizing over dealing with a client, I'm good with the billing. I don't have any of that now, but I have had.

CathysTaxes (talk|edits) said:

2 February 2013
Just use a tazor on them. That should drop them quickly. Seriously, some clients are a PITA. One left me his usual annual whining about my fee message. I haven't called him back because I don't know how I would respond to him. Plus when he's here, I have to put up with his witless comments. I didn't vote for the current President, but he is the President and that office requires respect and I'm sick of this guy's tasteless comments. Then there was the barrage about the US Postal Service because he still hadn't received his refund check (I now have him do direct deposit) and this is because he changed apartments in his building (he actually went from apt 1 to apt 10, so I didn't even notice it and he doesn't tell me either) and I told him the USPS probably has a policy when it comes to government correspondence to not deliver to another address, but the idiot kept up his rant.

Ckenefick (talk|edits) said:

2 February 2013
Sounds like you need to tell this guy to take a hike. And I really love those far-leaning political clients. When the Republicans come in, I act like a Democrat. And when the Democrats come in, I act like a Republican.

And I always love the comment: "That GD Obama. I can't believe I gotta pay more tax because of this."

To which I often have to reply: "Umm, that provision has been in the law since 1972."

ZL28 (talk|edits) said:

2 February 2013
I guess it all depends on your mindset; if you are the type of personality that can handle a PITA and flip them to a good client, that's great and you should pursue that avenue.

If you find a client is a PITA and/or complains about fees and that upsets you, seems like a good idea to get rid of the client as I have found it detriments your relationship with other clients.

Ckenefick (talk|edits) said:

2 February 2013
and I'm sick of this guy's tasteless comments.

Like what?

Death&Taxes (talk|edits) said:

2 February 2013
And you could paraphrase that line of Oscar Levant's regarding Zsa Zsa Gabor: I treasure every moment I do not see you.

And there are a few other great lines to use here:

http://www.just-one-liners.com/ppl/oscar-levant

Jrochestercpa (talk|edits) said:

2 February 2013
I forewarned a good portion of my clients last fall that they no longer fit the profile for my practice. I even told them how they did not fit (most were too much work, too little fee). I also stated that they were free to return or leave, but if they returned, they would be fit into the profile for my practice (up go your fees). Some have already called, saying they want to stay and asking how much their fee would increase. A couple actually called and apologized. Last Wednesday, a client who did not get the letter called me, saying he heard from another client about their letter and wanted to know if he was going to get one. When I told him no, he was thankful. 80% have not made any contact. Most of the fees would nearly double, so if 50% come back, I am even in dollars............and way ahead in lack of headaches.

CathysTaxes (talk|edits) said:

4 February 2013
and I'm sick of this guy's tasteless comments.

Like what?

Chris, they are too offensive to post here. Borderline racist. I don't want to offend anyone here by repeating these comments.

I haven't returned his call (Jan 29th) and I'm not. I definitely have to raise fees this year. I had to do an emergency switch of tax software and I may be burned on the cost of the last one, so my software costs are a lot higher than last years.

And I always love the comment: "That GD Obama. I can't believe I gotta pay more tax because of this."

With every administration, you get the same type of stupid comment, but different name. I tell the fool making the comment how long the law has been in place.

Taxea (talk|edits) said:

4 February 2013
Tony- what is your reminder fee? I charge $50. to entice them to find their copy but they'd rather pay it than take the time to look for the one they already have. How do you define the reminder fee if asked?

This was included in my letter informing my clients that the prep portion of my business had been sold: The new tax season is right around the corner. The bad news is that when the presidential election started I told myself that if Obama were to be reelected it would be the end of the road for me and taxes. I find that I have lost the joy in my work thanks to a “do-nothing” Congress and a president that insists he is “with the Democrats” and not a representative of all of the citizens of the United States. Though this still sounds like a really good reason for me to quit. I wanted the guilty parties to know they had a lot to do with my decision.

Gazoo (talk|edits) said:

4 February 2013
Quote: "not a representative of all of the citizens of the United States"

Have no fear. There is no reason to leave the tax business, because it turns out that he is a representative of the majority of the people, which is all you can usually hope for.

"A cascade of polling has reaffirmed that on issue after issue, mainstream America is with the president." David Shrum.

Article citing many polls is here: http://www.thedailybeast.com/articles/2013/02/01/obama-realigns-the-gop-declines-the-new-political-paradigm.html

Anchorman (talk|edits) said:

4 February 2013
If this was Facebook, I'd have to click "like" on just about every post here. Fortunately, this is not Facebook.  :)

Tonymontana (talk|edits) said:

4 February 2013
Taxea- My reminder fee is the $50.

I'm usually pretty cool when someone asks for a copy their return. I'll offer to email it for free, but they MUST request it by email for me to do it. I don't want to have to try and write down their funky email address and take a chance of emailing it to the wrong person.

I rarely implement the $50 fee. I only do that when they insist on a hard copy, or that I fax it or forward it over to their loan officer or something like that.

ZL28- I agree with your post. PITA clients will make you bitter towards your good clients. Get rid of them.

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