The Jason Dinesen Plan for Preparer Regulation

logoSo much virtual ink has been spilled on tax blogs over the last few years about preparer regulation. And here’s another post.

But I’m going in a different direction with this one.

If I opposed the mandatory RTRP program, and I’m skeptical of voluntary programs, what exactly DO I support?

PTIN Solution

The IRS already has mechanisms at its disposal to regulate preparers.

Every paid preparer must have a Preparer Tax Identification Number, or PTIN. The PTIN must be put on every return the preparer prepares.

This gives the IRS the mechanism to see who’s preparing tax returns. It also gives them the mechanism to control those preparers by seeing which preparers make the most mistakes.

The IRS is Already Doing This

If you follow the disciplinary actions of the IRS Office of Professional Responsibility, you’ll notice that unenrolled preparers (meaning, preparers who aren’t EAs, CPAs or attorneys) do indeed get busted by the IRS.

The IRS is already using the tools at its disposal to regulate the unenrolled.

Which begs the question of why they need a regulatory program — mandatory or voluntary — at all.

When Does Proactive Planning Work?

window-washer-30554I recently wrote a post about accountants providing proactive advice to clients. The point I made in that post is: it’s not nearly as easy to give proactive advice to clients as the “experts” and critics say.

Most business clients the average accountant deals with are Joe the Window Washer types. They want to run their business and mostly be left alone.

But obviously not all clients are Joe the Window Washer. For some clients, proactive planning is not just a “want” but a legitimate need.

Who are those clients?

They Have Staff Doing Most of the Work

Clients who benefit most from proactive planning are those where the owner is not the one in the trenches doing the work every single day. The owner has employees who do the day-to-day work.

If we use Joe the Window Washer: this would be like Joe hiring crews to wash the windows and hiring a foreman to oversee the crews while Joe hangs up his squeegee and doesn’t wash windows himself anymore.

These types of owners have more time to do things such as meet with accountants because they have staff in place to do the day-to-day work of serving customers.

These types of owners probably have more money to spend on making changes because they’re already shelling out thousands of dollars a month in payroll (thus implying that they have positive cash flow).

These types of owners probably are more inclined to change the way the business operates, because they have managers in place to help facilitate the change.

What About the Typical Main-Street Type of Business?

Like I talked about in my first post on this subject, the typical Joe the Window Washer main-street business often neither needs nor wants proactive planning from their accountant — they just want the work done. Usually that means preparing the tax return.

In a few cases, I’ve had success with proactive planning with the Joes of the world. In those cases, Joe decided that he wants to take his business to the next level and he knows it’s going to take an investment of time and money, and he’s willing to make that investment.

More to come in future posts, but I’m curious to know what other accountants and business owners think about this topic. Feel free to leave comments below or send me an e-mail at


On Accountants and Proactive Business Advice

Image courtesy of user "condesign" on
Image courtesy of user “condesign” on

What does “proactive planning” mean?

Studies show the number-one complaint small businesses have about their accountant is: the accountant doesn’t provide proactive advice.

The problem is, there’s no advice for accountants on what “proactive advice” means and how accountants are supposed to implement this in the real world with typical small business clients.


One way of looking at proactive planning is to say it means helping business owners identify trends and problems before the fact rather than after the fact.

I try to do this. And I think most reputable accountants do, too.

But here’s the reality: providing proactive advice is not nearly as simple as articles like the one I linked to above make it sound like.


When I’m helping a client with proactive planning, I ask questions such as:

  • Who are your biggest customers and what are you doing for them?
  • How can you generate more revenue from the middle-of-the-pack customers?
  • How profitable are your product lines or service areas?
  • What about your internal procedures? Are you running your business as efficiently as you could be?
  • What’s your cash flow look like? What sorts of big purchases are on the horizon?
  • If there’s excess cash sitting around, we should look at investing it. Would you like to talk with an investment advisor?

This is work for me … and for the business owner.

Articles such as the one linked to above make it sound like accountants are supposed to be an omniscient Yoda, dispensing proactive advice out of the sky.

This is unfair to accountants, and it leaves out the fact that it’s a two way street: the business owner has to be an active participant in the process.

It’s also tone-deaf to the realities the typical main-street business faces.


Most of the business owners I work with share a close kinship with Joe the Window Washer.

Things such as bookkeeping, accounting, taxes — and yes, proactive planning — are understandably low on Joe’s list of priorities after things such as serving customers and making payroll and keeping the lights on.

I understand this because I am a Joe the Window Washer myself.

Sure, Joe might say on a survey that he’d like proactive advice, but what he really wants from me is for the work to get done — generally that means getting the tax return filed.

If I can help find an extra deduction here or there, Joe is happy.

Joe also expects that I’ll review his information and let him know about major problems I see, such as compliance issues that could get him busted by the government.

But Joe never mentions that he’d like “proactive advice.”

If I bring up the subject of proactive planning, Joe says he’s not interested, or he’ll punt and defer the discussion til later (and “later” never comes).


Meetings take time. Proactive planning takes time.

Joe doesn’t have time. He has a business to run!

There might be a need to spend money in order to carry out  a proactive plan.

Joe is doing the best he can with limited cash. He doesn’t have extra money to spend on changes to the way he operates.

The saying of “you have to spend money to make money” is hard to fathom for people like Joe because Joe legitimately has no extra money to spend on changes. I know because this describes my own business.

Plus, taking action on proactive planning almost certainly involves change to the way the business operates.

Joe doesn’t want change. He just wants to run his business and be left alone.

And here’s where the “experts” and practice-management gurus are tone-deaf on this topic:

For the typical main-street/Joe-the-Window-Washer business that the average accountant deals with most of the time, there’s not much advice I can give Joe on how to run his business other than “keep serving your customers and fighting the good fight. Talk to me first before you make major purchases or major changes.”


These are factors I see that make it hard for accountants to engage in as much proactive planning as the “experts” say we should.

I don’t think accountants are to blame, nor do I think business owners are to blame. It’s not a matter of “blame.”

We’re all doing the best we can with limited time and limited resources.

More to come in future posts.

Tax Season Recap 2015: What a Strange Season, Part 2 (Trends I Noticed)

Image courtesy of user johnhain on

In Part 1 I laid out how tax season went for me in general. Having a salivary gland removed from my mouth was the highlight – if you can call it that – of my season. Here in part 2, I’ll talk about the trends I noticed.

In no particular order:

  • Couples in same-sex marriages got bit by changes to their withholding in 2014 — the first full calendar year after the DOMA ruling. I’m going to write an entire blog post on this topic at some point. Some of my clients in same-sex marriages owed THOUSANDS of dollars on their 2014 returns, after getting thousands of dollars of refunds in prior years, all because their paycheck withholding changed from using the “single” rates to using the “married” rates for withholding.
  • In general, refunds seemed smaller for most people. I haven’t had a chance to fully analyze this to see if it is reality or just my perception.
  • I set up more payment plans (Form 9465 installment agreements) for clients than ever before.
  • I have more tax returns than ever on extension, so “tax season” isn’t really over.
  • The ACA wasn’t really that big of a deal. I keep reading all these horror stories online about accountants saying this was the “worst season ever” because of the ACA. Yes, it meant asking more questions and possibly filling out more forms, but I don’t get what was so horrific about it from a tax-preparation standpoint.
  • It’s become nearly impossible to find times to meet with people. Their schedules — and mine — are busier than ever. Thankfully, many people welcomed my new and improved secure website for file exchange, which helps negate the need for face-to-face meetings.
  • On the other hand, some clients violently rejected my suggestion that they use technology to work with me. “Violently” is only a slight exaggeration. Some people got downright nasty about the suggestion that they use the secure website. Those doing the rejecting were not always older people – plenty of young people who seem tech-savvy were nasty about the idea too.
  • Client turnover was higher for me this year. I gained a lot of new clients but also lost a lot of price-sensitive clients. This isn’t a bad thing, necessarily, but just something I noticed.
  • The IRS e-file system was pleasantly fast this year. E-file confirmations would come back in a matter of a few hours.
  • Strangely (but refreshingly) — I had 0 identity theft cases this season.

Tax Season Recap 2015: What a Strange Season, Part 1

Me, looking totally thrilled the day after having a salivary gland removed from my mouth. Notice the stylish gauze wrap around my neck.
Me, looking totally thrilled the day after having a salivary gland removed from my mouth in late March. Notice the stylish gauze wrap around my neck.

Another April 15th has come and gone. What a year.

If it wasn’t for health problems that required surgery in the middle of the season, I would actually say that this was a pretty good season.

I was more efficient than ever this season. I got work done faster than ever — even with having to have surgery on March 23rd … to remove a salivary gland.

Yep, that’s something you don’t hear about very often.

I’ve had on and off infections for years in a gland along my left jaw. In late November, a lump developed there. A CT scan showed a stone had developed in the gland. Like a kidney stone, but in a salivary gland.

After a few months of watching and waiting, the gland started acting up. Like, flaring to the size of an orange when I would eat.

So the decision was made to take the gland out, and I wanted it DONE, even if it was in the heat of tax season. It’s good I had it done, because the surgeon — who was expecting to find a slightly swollen gland — instead found a gland swollen to 5-times the normal size.

I suppose that’s “too much information” territory, but that was my tax season.

Other than the surgery, my season went smoothly. There were the usual issues here and there with getting info from clients, and a few clients were surly or price-sensitive. But it wasn’t too bad overall.

That was my tax season. It’s not really over, because I have more returns than ever on extension.

In Part 2 on Tuesday Thursday, I’ll talk about trends I noticed.