Why Do Unethical Clients Bother Working With Tax and Accounting Pros?

why-234596_1280I’ve been lucky to have not encountered too many unethical clients in my short time on my own in this business. But I have encountered a few, and they quickly become ex-clients.

What I don’t understand is, if you own a business and you’re all about gaming the system, not reporting income, not filing the required reporting forms, etc. — why would you even bother working with an accountant to begin with?

Things business owners have said to me:

  • “I’m not going to report my cash receipts. I know what I can get by with, and if I don’t tell you about it, there’s nothing you can do about it.”
  • “I’m not filing a tax return in (insert name of state where the company conducts extensive amounts of business).”
  • “I’m not collecting sales tax.” (The exact quote was “I’m not fu#king serving as a collection agency for the godd@mned government”)

These discussions end with the client looking elsewhere for an accountant.

What I want to know is, if a business owner has this type of attitude to begin with, why would they even seek out a licensed professional to work with?

How do they think I, or any licensed professional, will respond when they say “I’m not fu#king serving as a collection agency for the godd@mned government.” Do they think I’ll just give them a wink-wink, nudge-nudge and laugh about it?

The question can be applied more broadly to unethical taxpayers in general, including the non-business-owner individual who wants to play games on their personal tax return. Why would they come to a licensed professional to begin with?

I asked one of my peers about this and he said it’s because that type of person likes to feel important. They “have an accountant” and they can brag about it to their friends.

I think maybe it’s like how some people “doctor shop” til they find a doctor who will give them antibiotics every time they get the sniffles. Keep changing doctors til you find one who tells you what you want to hear. \

The unethical client tests the waters. If they discover that this accountant expects them to follow the law, they’ll move on til they find an accountant who will overlook their transgressions, or who perhaps won’t ask as many questions and thus won’t stumble upon their transgressions.

Image courtesy of user Geralt on Pixabay.com

Tax Season Tunes: 2015

Image courtesy of user "OpenClips" on Pixabay.com
Image courtesy of user “OpenClips” on Pixabay.com

Last year I wrote a post about what music I was listening to while I worked. That post was popular and generated some humorous feedback over the fact that I was listening almost exclusively to Gordon Lightfoot.

So … what am I listening to this year?

Not a lot has changed. Gordon still keeps me company most of the time. But I am occasionally mixing in other music.

Being an OCD, Type-A personality, I have a system. Approximately 50% of my workday is spent with my music on shuffle. Then I switch exclusively to Gordon.

And when I’m on shuffle, what will likely appear? Well. It could be Taylor Swift. Yes really – laugh all your want but I think her new “1989” album is brilliant.

It could be Neil Diamond (good Neil Diamond, not cheesy “Sweet Caroline” or “You Don’t Bring Me Flowers” nonsense). Or Billy Joel. Or AC/DC. Or Maroon 5. Or Juanes – a Columbian singer who sings in Spanish. I have no idea what he’s singing about but my wife is in love with him (she’s a professor of Spanish). He’s got some catchy tunes.

But it always comes back to Gordon. Last year I was infatuated with “Summertime Dream.” This year, it’s “Blackberry Wine,” “Race Among the Ruins,” and “Ringneck Loon.” I could listen to those songs on repeat over and over and over.

In the time it took to write this post, find an image to accompany the post, get the post on the calendar, etc., these are the songs that have played:

  • Time (Clock of the Heart) by Culture Club (I’m not a big Culture Club fan, but I have their greatest hits on account of my wife, who loves them)
  • An American Girl by Tom Petty
  • Soul for Every Cowboy by Big Head Todd & The Monsters
  • There’s a Platypus Controlling me (from the Phineas and Ferb TV show)
  • I Am … I Said (live in New York City in 2008) by Neil Diamond
  • Alberta Bound by Gordon Lightfoot
  • Rainy Day People by Gordon Lightfoot

Is Chamber of Commerce Membership Worth It?

Image courtesy of user Geralt on pixabay.com
Image courtesy of user Geralt on pixabay.com

I was struggling this year with whether or not to renew my dues to the local chamber of commerce.

Everywhere I’ve been, I’ve been a chamber supporter. In a prior life in a different town and different career, I served on the board of directors of the local chamber.

A common question small business owners — including me — face is whether a chamber membership is worth it.

From my days on a chamber board of directors, the standard answer that chambers give is: you get out of it what you put into it. In other words, if you are active and attend events, you’ll probably find it to be worth it.

And that’s what I was wrestling with when I was deciding whether to renew.

I am busy running my business. And when I’m not running my business, I have a wife and 2 little kids who deserve my time. That leaves very little time to go running around to events.

In my opinion, if you can’t consistently go to chamber events, it’s almost better to go to none at all.

This is because, on the rare occasion when you do attend an event, you’ll likely find that everyone else knows each other and they have their cliques where they stand around drinking, guffawing and slapping each other on the back while you stand there as the outsider. And all chambers that I’ve ever been a part of do a terrible job of making newcomers feel welcome at those type of events.

If you’re the type of person who can walk into a room and instantly win over strangers, this might be okay. But I am not that type of person, so sporadically attending networking events where I don’t know anyone is downright painful.

(I suppose there’s some deep psychological profile about me that can be drawn from the last 2 paragraphs.)

Ultimately, I decided to renew my membership, even though I’m in no position to be an active member.

I renewed because as a service provider who’s hoping to help more business clients, I think it lends credibility to me to say I’m a chamber member. Each business owner should review the pros and cons of chamber membership, because what’s true for me may not be true for other businesses.

Further Reading

Dawn Mentzer covered this topic on her “Instatiable Solopreneur” blog back in November.

I Like Mowing My Lawn and Shoveling Snow; Do You Like Preparing Your Tax Return?

One stretch of sidewalk I have to shovel.
One stretch of sidewalk I have to shovel.

This is a blog post about DIY tax preparation and whether it’s a good thing or a bad thing.

Here’s what I tell people about using a professional to prepare their tax return: if you know what you’re doing and you feel comfortable doing it yourself, then do it yourself.

I say it with no animosity. That’s really how I feel. More people are choosing to prepare their taxes themselves, and as I’ve written before, that’s not a bad thing.

One of the neighborhood kids keeps bugging me about snow removal and lawn mowing. I’ll give the kid credit: he’s a good entrepreneur. He provides these services to several people in the neighborhood.

But I always politely tell him no.

I like mowing my lawn and shoveling snow.

Certainly my life would be easier if I outsourced these tasks. I live on a large corner lot, making my lawn the biggest in the neighborhood. I also have 66 yards of sidewalks and 603 square feet of driveway and decks to clear of snow — with a shovel (my snowblower died 2 years ago and I’m too cheap to fix it).

And yes, I really did measure the exact amount of sidewalks, driveway and deck area one time.

I could pay someone else to mow the lawn and remove the snow. It would free me up to do other things.

But I enjoy the tasks. I’m good at it. And I know what I’m doing.

I see no value in hiring someone else to mow my lawn or shovel my snow.

The same principle holds true for people who choose to prepare their own taxes. If they know what they’re doing and they enjoy doing it, then I encourage people to do it themselves because they won’t see value in the work of a tax professional.

Ridiculous IRS Situations I’ve Recently Dealt With

lion-159448Here are just a few of the more ridiculous things I’ve dealt with involving the IRS over the last few months.

Will Our Refund Ever Come?

A client in a same-gender marriage filed an amended tax return in October 2013. They’re still waiting on their refund.

The IRS had a question about something on the return, which we answered months ago. Since July, the client has periodically gotten letters stating that the IRS needs “45 more days” to review their information.

I’ve tried calling. I’ve written letters. Nothing helps.

My understanding is that the IRS Taxpayer Advocate will only take things like this on if the client is suffering from a financial hardship by not receiving the refund (and they explained that “financial hardship” means the client is, for example, on the verge of being foreclosed on for not paying the mortgage).

My client is not in desperate financial straits … they just want this amended return processed. It’s been 15 months now.

But the client waits and waits.

We Need 45 Days, And We’ll Send Letters With Odd Dates on Them

A client filed an amended tax return in August 2014. In the fall, they got a letter saying the IRS needed “45 more days.”

Of course!

The issue was resolved in December, which is great. But even that was weird.

On December 21, the client got a letter in the mail – the letter was dated December 29.

The December 29th letter (received December 21st) said the client’s refund would be coming in the next two weeks.

A few days after the 21st, the client got their refund.

IRS Seemingly Loses $4,000 Check

A client filed their 2013 tax return in June 2014 and paid more than $4,000 in taxes owed. A few weeks later, the IRS sent the client a collection letter saying that the client owes more than $4,000 and containing the usual threats.

I wrote a letter to the IRS, including the check number and the date the IRS cashed the check, and telling the IRS to cease and desist with the collection attempts and instead review their records to find out what happened to the check.

The client got several “we need 45 more days” letters.

Finally a few weeks ago, the IRS sent a letter saying they found the payment, it had accidentally been misapplied in their system, and apologizing for any inconvenience.