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Discussion:What makes tax prep difficult?

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Discussion Forum Index --> Tax Questions --> What makes tax prep difficult?


Bengoshi (talk|edits) said:

8 March 2007
To me, it's the fact that we have to know a little (or a lot) about everything. Tax laws, trust/estate law, business law, life insurance, stocks/financial products, real estate, mortgages, and just about everything that attorneys and financial advisors dream up for our clients. Even though we might not be familiar w/ a transaction that the client does, we have to know how to research and report it for tax purposes. I've found that this is a profession where experience really does matter.

Wkstaxprep (talk|edits) said:

8 March 2007
i would say we have to know a lot about alot :)

we have to be many things at once.

here are some things i feel we have to be more often than not and sometimes all at once.

tax accountant friend listener detective psychologist bearer of bad news bearer of good news financial planner last but not least we have to be competent fro 3 months straight on very little sleep , lol :)

Bengoshi (talk|edits) said:

8 March 2007
You got that right Wks! I hate being the bearer of bad news but it feels great when there's good news too. And I know what you mean about playing detective...how many times in my short career I've had to snoop out information and facts from something seemingly mundane. (BTW there's a new show coming on NBC this month about an accountant/PI). Another thing I can't stand is all those forms from everywhere saying, "we do not provide any tax advice. Please consult your tax advisor."

Wkstaxprep (talk|edits) said:

8 March 2007
i hear you !

JR1 (talk|edits) said:

March 9, 2007
Actually, it's clueless clients. The ones where the return hits the corner of the desk waiting for one number...and you have to be their mom and keep calling, and they're like, oh, you need that? Duh. No, nothing else to do but keep on your a**...And the ones who go, I've got my papers ready, do you want me to drop them off? No, toss them up onto your roof, and the next goose will come by and grab them. That's the stuff that makes you nuts. Then there's Riley, constantly telling me what I don't know.

Death&Taxes (talk|edits) said:

9 March 2007
What makes tax prep difficult? This pain shooting up my left ar...................

JR1 (talk|edits) said:

March 9, 2007
And uncaring fellow pros?

Lhhesscpa (talk|edits) said:

9 March 2007
Congress and the IRS.

Deback (talk|edits) said:

March 9, 2007
JR1 - Did you mean, "Then there's Riley, constantly referring me to Code Sections, Regs, and what-not." We should have a Riley Roast this summer.

What makes tax prep difficult? Swollen eyeballs that won't get enough sleep and feel normal again until sometime in June. Talking on the phone and answering questions constantly, and hearing the same things from clients over and over again.

Cwatt1 (talk|edits) said:

9 March 2007
Let me impart what I hope is a little inspiration. I feel that, to a person, your profession is one of the most valuable there is. Why else would I want to join it?

As one of my accounting professors once said: "The tax code is the most difficult set of laws ever devised by man"!

Tax preparers in general (and may I say all of you in particular since I follow this forum with great interest) perform a magnificent service. Sure, not everybody appreciates you. Sure, clients want bigger refunds. Sure, clients want to pay less tax. But consider what would happen if you weren't there! Without you math- and accounting- and tax-oriented folks, this set of unbelievably complicated tax laws would have the general public all in looney bins!

God bless all of you!

Death&Taxes (talk|edits) said:

9 March 2007
Don't think that will get you a discount, Mr. Watt.

Cwatt1 (talk|edits) said:

9 March 2007
LOL! Hey, I hope to make a little $$ myself at this in the not-too-distant future.

Michaelstar (talk|edits) said:

9 March 2007
JR1 - I care.............  :-}

Gmikeg (talk|edits) said:

9 March 2007
OH, JR, I like you!

And playing mom to a 250 pound former bouncer with three businesses, and it's been two onths, and I still can't finish the return.

But me thinks the goose on the roof thing might works, my precious returns, my precious....

Bottom Line (talk|edits) said:

9 March 2007
TP "Is it done yet?"

Me "No" TP "What does it look like" Me "Well let me get out the crystal ball and waive my magic wand over it and see if a number flies up into the air"

TP "Is it done yet?" Me "No" TP "Is there a problem?" Me "No, there's no problem. You just delivered three boxes of crumpled up receipts to me yesterday afternoon and now you want me to have a full year's worth of bookkeeping done by this morning. The problem is that I usually try to sleep (unreasonable as that may seem) at least a few hours every night!"

Fortunately I've gotten most of the longer term clients trained :)

Death&Taxes (talk|edits) said:

9 March 2007
BL: ask them if they want you to recopy last year's. That will save time!

CrowJD (talk|edits) said:

9 March 2007
Go to your biggest public library and sit down with a copy of Harrison's Principles of Internal Medicine. It's the main text doctors train on. Then, just pick one, ONE area of tax law, of medium complexity (forget the GST). The complexity compares quite well BUT the tax law is not based on empircal evidence, rather the whims of politicians and special interests. It's a bit*h.

Death&Taxes (talk|edits) said:

9 March 2007
And vultures take advantage of this: Insurance and annuity salemen will call upon clients, bring you in cold, and then while looking at your client, say something like 'As David can tell you, Section ....(b)(3)(A) permits you to deduct blah blah blah blah.' Now there you sit, without access to books, on-line research tools etc and this numbskull is quoting Code and Regs to your client and using you as a sounding board. Your only retort is to say, 'It's not quite as simple as Brad is saying,' but the impression left with your client is that you are the dummy.

This little monologue tells it all: http://www.writing.com/main/view_item/item_id/260324

Taxea (talk|edits) said:

10 March 2007
People who start businesses without doing any research or have any knowledge of records keeping. The ones who use QB with no understanding of bookkeeping. Those who don't understand the difference between a bookkeeper/accountant and a tax preparer.

Natalie (talk|edits) said:

March 10, 2007
JR, you got any extra geese around? How does that work when the snow's on the roof? Pretty wet papers, huh?

Smokeytax (talk|edits) said:

10 March 2007
This discussion forum is THE BEST!

Back to work - it's 7:15 & I've only gotten 2 hours of work in so far today.

PVVCPA (talk|edits) said:

March 10, 2007
The hardest part are the few ungrateful clients, that, despite all that we do for them, remain thankless.

Example #1: The new or existing client that comes in with a lot of changes for this year. You sort through their stuff trying to figure out in an hour what happened during the last 12 months of their life. You talk about things like reasonable compensation from an S-Corp, or long-term gain planning on investments, or 1031 exchanging on rental property. You have gone over the hour and your next client is here. And then they say, "I don't feel like I am taking full advantage of all my tax deductions. What else should I be doing to improve my tax situation?"

Example #2: Last year, the client gasped when you told them their balance due. They berated you to help them lower their taxes and to give them more deductions. So you squeeze out a few more business miles, or you deduct a portion of their wife's cell phone because she helps out with the business, or you allow the previously nixed "business trip". Then, this year, they come in with a 1099-R from a former employer's 401(k) that they decided to cash out because they got tired of seeing it lose value every month.

Death&Taxes (talk|edits) said:

10 March 2007
My first year doing interview returns, I had a woman who broadcast the news on radio. She was married to a psychologist. Great income, no savings. She hinted he had some problems. They owed 3-4K, so she pulled out her Daytimers and kept finding trips for job interviews in other cities. After four of these, and doing the returns by hand, we had the balance at about $700. "I can live with that." I jumped up, grabbed my loafer off my foot and pounded it on the desk, yelling, "SOLD!"

She is still on the radio here, but long gone from my client list.

CrowJD (talk|edits) said:

10 March 2007
Taxea: Complaint: Clients that "Don't understand the difference between bookkeeper/accountant and tax preparer." That's just not practical to expect that today, unless you are lucky enough to only represent established businesses. I never wanted to learn QB, or any other accounting program. I wanted to focus on tax. But, since very few small companies today have a bookkeeper (or even a recordkeeper, or a filing cabinet), you really don't have any choice. I've been stunned with companies that are up to 1-2 mil. in gross revenue, with no clue, can't find organizational documents, don't even know what basis is, etc..

Will (talk|edits) said:

10 March 2007
As a newbie to the profession I am quite surprised about the state of basis tracking. Taxpayers themselves are responsible for tracking basis in their equities and small corps?1?!? lol I'm not sure if our esteemed leaders in congress are aware, but the general education system is pretty much in shambles and financial education wasn't it's strong suit when it was funded.

I wonder how wide the tax gap was in the last stock market craze? Are we close to getting basis on the 1099-b, now, a decade after the largest section of the US tax base discovered the equity market's charms??

Death&Taxes (talk|edits) said:

10 March 2007
Will: before the 1099B you had clients who would give you all their stock losses..........and that was it. They'd ask, 'can you deduct a loss when you sell stock?' and you'd remember they'd asked the same question 2-3 years prior. Basis was simpler then; you only had to keep it on the ones on which you had losses.

Wkstaxprep (talk|edits) said:

10 March 2007
Actuallly, as crazy as this sounds for the most part, i really do enjoy being a tax professional. We get to meet new people all the time, and of course there are exceptions, but we meet some cool people, many do appreciate our service, everyone can relate to what we do because everyone has to file their taxes, and to boot we have a few good laughs now and then :)

And for many of us on the board we're self employed, let's not forget tyhe misery of working for an employer who is always hovering over our shoulder "is it done yet, don't spend a lot of time, can you come in saturday and for a half day sunday, etc. etc." and for what just for a salary that barely pays the bills and never anyone sayin good job, you do good work, only pointing out errors like "hey, u missed the sdi deduction on schedule A, u need to be more careful, even though 99.9% of the returns are done and what about "dear employyes if u work 10 hrs on saturday we will give you $4 meal allowance" how how thoughtful,are you sure your firm can afford it. lol,lol :)

At least now we can feel the appreciation directly from our clients, we can grow our business at the same time our clients succeed, and we can reap the rewards of financial freedom. i love it, all kidding aside.

plus, we work hard fro 4-5 months out of the year adn it gives us opportunity to explore other things during slow times.

You now what my greatest fear is in this field ? that the IRS will one year smplify averything and create a flat tax or simple method. I'v ebeen told not to worry that it won;t happen, is anyone else worried about this ?

Will

Sandysea (talk|edits) said:

10 March 2007
Even with a "flat tax" Will, the amount that is subject to the flat tax will be argued for years to come. Still there will be deductions from AGI that will be subject to it...and if I lose my business because there is no need anymore, then I will sell pencils on the street...hehe

Wkstaxprep (talk|edits) said:

10 March 2007
what kind of pencils, and how much will you sell them for ? :)

Will (talk|edits) said:

10 March 2007
The flat tax is the AMT 26-28%, don't sell the pencils you are going to need them!

Sandysea (talk|edits) said:

10 March 2007
HEHE; but these are special pencils....I am told to "sharpen my pencil" all the time...hehehe

Bottom Line (talk|edits) said:

10 March 2007
The non-tax preparer side of me likes the concept of the fair tax. I don't think we'll ever be out of a job though. Politicians can't help but fiddle with things. It's in their nature. Once they start fiddling with a flat or fair or any other type of tax we all have a job again.

I do agree with Wkstaxprep. I could never work for "Corporate America" again. I'm still working the same crazy hours and making a little bit more money but I'm happy and appreciated now. I also like getting my money from lots of different sources (every client is a different source). Never have liked putting all my eggs in one basket.

Klesher (talk|edits) said:

10 March 2007
Will - I agree with everything you say . I love my job - meeting new people, seeing the same clents every year , with a different set of problems. I love the challenges every tax season brings. I started on my own April 16, 1984 after working for a small public accounting firm. And I still have many of those original clients - we have all grown together! I remember that old CPA said " you have to have a screw loose to enjoy this work" Yup I think my screws are all loose LOL

Wkstaxprep (talk|edits) said:

10 March 2007
at least one screw loose is mandatory in our field. having a second one loose is the norm :)

Bogie (talk|edits) said:

10 March 2007
JR, you are the best. I never knew so many CPA's felt the same as I do. At least we belong to the same group and can help each other. My name is Boggus and I should have gone the route of H & R Block and put up a big flashing sign "Boggus Returns Prepared Here'.

I need my mother.

Sandysea (talk|edits) said:

10 March 2007
OMG...hehehehe; thanks for the laughs....I needed them....

JR1 (talk|edits) said:

March 10, 2007
No worries on a flat tax, ever. Here's why: In 1986, Congress discovered the cookie jar. By that I mean, that at that point and ever since, when they've needed to raise a few million for something, they insert or delete a paragraph in the tax code, making the code now inccomprehensible in many places, since the connecting thoughts are either gone or altered. I've seen tapes of round tables in the big hooh haah's offices...the tax attorneys in NY, who laugh out loud at the incomprehensibility of it all now. That was over ten years ago! Congress can alter gov't policy by playing with tax law now more than ever. So when they don't want power, we'll have flat tax. . .RIGHT!

Klesher (talk|edits) said:

10 March 2007
Her is what I hate - clients bringing their "stuff" in paper bags and when you open the bag they stink!!!! Just had one and had to fumagate my office!

PVVCPA (talk|edits) said:

March 10, 2007
Just got off the phone with a client. I sent him home after the appointment to research the cost basis on some mutual funds he sold. Funny, he doesn't remember that I needed the same information last year, probably because I did the work for him.

So he calls me and says he has gone through papers and files and called his brokers. But he still doesn't understand "What the HELL I need this cost stuff for, anyhow". But he said he would put together a summary for me so that I don't have to spend the time doing it, i.e. bill him for the work that I had to do last year. Funny, he remembers last year's bill.

I have a feeling that his "summary" is gonna still require me to do all the same work I had to last year, possibly more. This year's bill might cause him to remember that he needs a new preparer.

Kevinh5 (talk|edits) said:

10 March 2007
Make sure he has reconciled his bank account too.

JR1 (talk|edits) said:

March 10, 2007
Just report the proceeds, then.

Taxea (talk|edits) said:

10 March 2007
CrowJD...that's exactly my point...I love doing tax prep...I am not in the bookkeeping business and it is not my responsibility as a preparer to reconcile the clients books before I do their taxes. I think it is very reasonable to expect a business owner to be responsible for all phases of the business. Where does it say in "tax preparation" that it includes accounting? Not in any of my books. taxea

Wkstaxprep (talk|edits) said:

13 March 2007
Glad to hear the flat tax is a remote possibility :)

Wkstaxprep (talk|edits) said:

14 March 2007
anyone had this phone conversation with a client yet this year after the all the open items have been resolved over the phone "you must be busy now, how are things going with you?" our reply "yes, of course, it's that time of year for us, sure i'm VERY busy"

and then they still want to chit chat about nonsense for 15 minutes, in the meanwhile you hear the call waiting button from another call from a client who's returning your call froma half hour earlier

)

Will

JR1 (talk|edits) said:

March 14, 2007
I do find that this is one time of year that I can be rude and get away with it...I just tell folks, 'not now...' and go.

Death&Taxes (talk|edits) said:

14 March 2007
"This must be your busy time of year, huh?" "No, I'm actually talking to you waiting at the 5th tee."

Laticiaw (talk|edits) said:

14 March 2007
Here's a great one...they wait until thier meeting with you and let you know that they sold off a huge portion of their assets in January of the previous year (didn't tell you at that interview that it had happened so you could do some tax planning) and then don't understand why they are not only paying taxes but paying penalties for paying late (I'm paying by April 1st and that's all that counts!!!)

CScpa (talk|edits) said:

14 March 2007
You guys should read my question on the client that thought they had incorporated. I mean, how do you not realize you didn't go to the courthouse and file those papers??? It's become a real mess.

Laticiaw (talk|edits) said:

14 March 2007
Because right now the public school system is too busy providing daycare centers for our kids that it hasn't figured out that teaching those kids something means that we end up like taxpayers that we get every year. I still love the ones that think that when I give them a flat rate that I am charging too much, but they go over to H&R Block and pay MORE!!! H&R gets away with it because they bury their fees in the Rapid Refund...I make sure they know it up front...

Laticiaw (talk|edits) said:

14 March 2007
Excuse me I meant to say -- not teaching those kids something...

Oh and for the one that complains about doing bookkeeping -- send those clients my way...word of advice if you don't want to do the accounting? Don't do any Corporation or Schedule E's or C's. Then you don't have to worry about doing any accounting.

Bottom Line (talk|edits) said:

15 March 2007
January's my worst month - W-2's and 1099's. The really discouraging part is that you can never charge enough for all the January headaches. April is second. Trying to finish tax season and then cram three weeks worth of payroll taxes into two weeks. On top of that the phone starts ringing the morning of 4/16 with "Now that tax season is over, I guess you have plenty of time to do my return that I was nice enough to tell you to extend."

PVVCPA (talk|edits) said:

March 15, 2007
Don't forget the, "You must take the rest of April off after the 15th"

Bottom Line (talk|edits) said:

15 March 2007
Get it all the time. Can't take vacation until mid-May. :(

PVVCPA (talk|edits) said:

March 15, 2007
We have 4 part-time people here that go full-time during tax season. However, we make them stay at full time until April 30th.

Deback (talk|edits) said:

March 15, 2007
Many of my clients will ask me where I'll go after April 15th. I almost always answer, "Upstairs."

Taxea (talk|edits) said:

15 March 2007
I take the rest of the year off! taxea

Klesher (talk|edits) said:

15 March 2007
Bottom Line - Agree with everything you say - January and April are the worse and I HATE cramming those payroll taxes into two weeks! And then the idiots that call 4-16 and say "Oh yeah, now tax season is over" you can rest! I NEVER answer the phone on April 16.

Death&Taxes (talk|edits) said:

15 March 2007
Nicole, my daughter-in-law-to-be, called Pam this morning not realizing it was a work day for Pam. She thought it was Wednesday when Pam works half-day in the afternoon. Pam was laughing, but I reminded her that Nicole was probably just getting to her job as an Associate in a regional CPA firm in West Orange, where she processes tax returns for a living. As she puts it, the partner she works for puts the completions in a bin and she can't go home until they are done....but he often waits until nearly 4 pm to do so.

Natalie (talk|edits) said:

March 16, 2007
D&T so does she come in late on that day to compensate for having to stay late?

Death&Taxes (talk|edits) said:

16 March 2007
I don't know....she was driving to work this morning so I doubt it....they do give lovely bonuses and have been very good to her...she makes 43K without degree or title plus they are lenient out of season.

Gmikeg (talk|edits) said:

16 March 2007
My eight cents: Boy I miss New York, Air Traffic Control, Boating, and how low-stress I thought this career would be.............................

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