A HOLIDAY SEASON TAX PRACTICE TIP

Many years ago, before I was “gifted” my mentor’s tax practice at the end of the last millennium, I had only about 100 of my own 1040 clients.  In December I would send each client on my list a tax-themed Christmas card, usually purchased from an accountant supply house, and, as I did with all my Christmas cards, included an annual “year-in-travel” newsletter.

Many families include in their Christmas card a newsletter talking about what the family has been up to during the year, often with emphasis on their kids’ achievements.  My uncle, a confirmed bachelor, was a world traveler and would each year compose a Christmas newsletter that outlined his many travels that year.  We occasionally travelled together.  I followed in his footsteps, both in travelling (I am, after all, known as the “wandering” tax pro) and in writing an annual Christmas letter highlighting my travels for the year.

As my travels used to include attending both the NATP Annual Conference and the NSTP National Convention each year at various cities throughout the US, many of which I would not have visited were it not for the tax CPE, these trips were reported in my letter, as were trips to Atlantic City and other locations for year-end tax update classes.  I found this a subtle but effective way of reminding my clients of my extensive continuing professional education throughout the year to keep up with the ever-changing 1040.

When I took over my mentor’s practice my client list expanded from 100 to well over 300.  It became too expensive to send each client a Christmas card.  But I continued to send out the Christmas travel letter as part of my annual January informational mailing to clients.

Over the years I have had more favorable comments on this annual Christmas travel letter than any other mailing sent to clients.  Many clients, to this day, tell me they look forward to reading it each year.

Do you have a unique idea that has worked in your tax practice?  Email me at rdftaxpro@yahoo.com with TAX PRACTICE TIP in the “subject line”.

TAFN

I have been preparing 1040s since 1972. Over the years I have developed a collection of forms, schedules and worksheets that have proven very helpful in my practice. 

Some of my forms are given to clients to help them provide me with the information I need to properly prepare their returns. Some are used as “memos” to the client’s copy and my office file copy to back-up items reported on the returns. Others are used as attachments to the returns.

I offer this compilation to you for only $7.95!

Click below for more information-

http://robertdflach.blogspot.com/p/blog-page.html

JUST SAY NO!

 

Here is an interesting topic for discussion.

 

I have said in my e-book SO YOU WANT TO BE A TAX PREPARER –

 

“The US Tax Code is a convoluted mucking fess.  Special tax situations require specialized basic education and training and continuing professional education.  It is my belief that you choose tax situations that you will not do.

 

Besides the need for additional specialized initial and ongoing education and training, many special tax situations come with additional work, such as more stringent “due diligence” requirements, additional exposure to liability for error and preparer penalties, and additional potential for just plain agita and aggravation.

 

I would seriously consider not accepting, for example, tax returns with a claim for the Earned Income Tax Credit, or returns with foreign source income that require additional FBAR reports and filings.   

 

And, to be perfectly honest, looking back over my 45 years in the business, if I were to start all over again I think I would limit my practice to 1040s.  Period.  No 1065s.  No 1120s.  No 1041s.  No 990s.  Just 1040s.  Why?  Again, to limit my need for ongoing CPE to 1040 issues only, and to limit my exposure to agita and liability.  I have found that there is more potential for problems with business entity returns than with 1040s.”

 

Do any of you currently limit your practice to 1040s only?  Do you wish you had?

 

Do you refuse returns with EIC and other specific tax situations? Do any of you wish that you had? 

 

Is limiting areas of practice impossible for a tax preparer just starting out? 

 

What do you think?

 

TAFN

 

 

 

ANOTHER PRACTICE TIP AND SOME TAXPRO BUZZ

Here is a practice tip to cover your arse when it comes to agita-producing clients who want to blame you for their omissions when caught by the IRS.

 

Place a personalized stamp or mark on all original documents you have viewed in the course of preparing an income tax return and will return to the client.  This way a client can’t say he gave you information that you failed to include on the return if he is audited and tries to claim “I told my tax preparer, but he forgot to report it”.

 

For example - enter your initials followed by a sequential number and an arbitrarily chosen non-sequential capital letter - RDF1C, RDF2T, RDF3W, RDF4M, RDF5F - with a colored pen on each item.  The letter “F”, or whatever other letter you chose, indicates the last document viewed in the sequence.  So even the most devious client cannot sneak in a 6th item.

 

When I first provided this idea in another venue I received the following comment -

 

“I read the part of your post about marking the documents presented for tax prep.  I started doing that a few years ago after a client did exactly what you described.  I use a specific rubber stamp for each preparer in the office. I also staple the paperwork into the client folder.  So when a client told me I missed a 1099-B this year we asked for the original file I gave him.  Funny how the paper I missed didn’t have my stamp on it nor did it show staple marks.”    

 

Do you have an idea that has worked in your practice?  You can email me at rdftaxpro@yahoo.com with TAX PRACTICE TIP in the “subject line”.  I will post a compilation of submitted tips here in a future post.

 

TAXPRO BUZZ

 

+ Have you heard yet?  Kay Bell, the yellow rose of taxes, tells us “IRS to seek stay in PTIN fee collection court ruling while it pondersits additional legal options” at DON’T MESS WITH TAXES.

 

While Kay says the IRS and Department of Justice have not officially decided to appeal the decision that shut down the collection of a fee to apply for or renew a tax preparer’s “PTIN” (Preparer Tax Identification Number), IRS Commissioner Koskinen “said his agency is likely to appeal the PTIN ruling”.

 

So, fellow tax pros, don’t expect a PTIN fee refund check in the mail any time soon.

 

+ I came across this article via Twitter – “Which Superheroes Would Make the Best CPAs?".

 

Of course, coming from an AICPA source, it has the arrogance of limiting its reference to CPAs when it applies to all accountants and tax pros as well.

 

+ My editor at the NJ TAXING TIMES told me, and other NJ tax preparers, about a great resource for tax pros and taxpayers – a “Glossary of Tax Terms” from the NJ Division of Taxation.  It is indeed comprehensive and the individual definitions include links to appropriate pages on the NJDOT website.

 

+ Here is a reminder for tax pros with clients receiving a Form 1099-C for cancellation of debt from fellow tax blogger Jason Dinesen - “Insolvency Calculation: What Does “Interest in a Retirement Account” Mean?”

 

TAFN

 

 

I have been preparing 1040s since 1972. Over the years I have developed a collection of forms, schedules and worksheets that have proven very helpful in my practice. 

 

Some of my forms are given to clients to help them provide me with the information I need to properly prepare their returns. Some are used as “memos” to the client’s copy and my office file copy to back-up items reported on the returns. Others are used as attachments to the returns.

 

I offer this compilation to you for only $7.95!

 

Click below for more information-

http://robertdflach.blogspot.com/p/blog-page.html