Tax Lawyer's Blog

Kay Bell makes some excellent points about bad tax clients who deliver to their tax preparers shoeboxes full of coffee stained tax receipts just days before the filing deadline:

Failure to provide all necessary information to your tax preparer is a major complaint from those who make their livings doing taxes and tax planning for others.

Being very late in finally getting your tax pro the material is right up there with client haphazardness.

And as [one tax preparer] pointed out, while it royally irritates your tax pro, it also is likely to cost you money.

You’re going to have to pay for the additional time your preparer spends filling out and then re-filling forms as you straggle in week after week with additional information.

And if you never get all the tax material or provide wrong data to your preparer, he or she won’t be able to find all the tax breaks to which you’re entitled, meaning you’ll likely leave some of your money in Uncle Sam’s hands.

Here’s my take on the issue:

Bad Client Rules

Regarding clients, tax or otherwise, I have developed a few rules over the years. I call them Peter’s Principles:

1. Clients who pay the least, complain the most
2. Clients who are the least cooperative, expect the most
3. Clients who give the least respect, demand the most
4. Clients who are cheap, uncooperative, disrespectful, you regret the most

My Advice

Here’s a little bit of advice that might help you avoid or at least deal successfully with the demon client:

1. Be selective when accepting engagements. The client who pays you $150 for a tax return may haunt you for years to come. ¹
2. Have the client sign an engagement letter which clearly states what is expected of him and the conditions under which you can charge additional fees or terminate the engagement.
3. Pay your malpractice premiums. This is the client most likely to make a claim against you.
4. Get religion.

Footnotes:

¹  Here are some red flags that will alert you that the client you are about to accept is indeed the devil:

• You are the 12th tax preparer he’s had in the last 2 years  (they were all assholes, unlike you, who seems like a pretty nice guy);
• He acts like he owns the place, wandering around your office like a long lost uncle;
• He complains about how others have made his life miserable (his dry cleaner screwed him, his plumber charges too much, his kids are ungrateful, American Idol sucks this year);
• He acts shocked when you tell him your fee (this is purely for show to set the stage for extreme dickering);
• He is late for scheduled appointments or misses them altogether (but is outraged when you are late or have to reschedule an appointment);
• He’s your in-law.

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