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

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Image courtesy of user johnhain on Pixabay.com

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.

It’s Pointless for EAs to Attack CPAs

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I’ve been thinking about writing this post for a long time. Earlier this tax season, a post on LinkedIn irritated me enough to make me put this on my “to blog about” list. Time constraints of tax season mean that it’s taken me a good 4+ weeks to actually get around to writing this post.

The gist of what I saw on LinkedIn was EAs and unlicensed preparers slamming CPAs because, according to the people commenting on the discussion, CPAs just have their minions prepare the returns and the CPA signs off on it without even reviewing.

EAs were involved in this discussion, saying how this proves the superiority of EAs because EAs carefully review each return they file, as opposed to those clueless CPAs who rely on unlicensed minions to do the actual preparation.

(I failed to grab the link to the discussion at the time I read it, and a search of LinkedIn and my browsing history failed to find the discussion again, otherwise I’d link to it here.)

This discussion bothered me. Do some CPA firms rely on low-level, unlicensed minions to prepare returns? Sure. But guess what … I know EAs who do the same thing.

As an EA, I think it’s pointless for us to attack CPAs.

Like it or not, EAs have no name recognition. CPAs do.

This gets back to the whole “CPAs are the United States and EAs are Liechtenstein” analogy that I’ve used before.

EAs are in no position to “go after” CPAs. It’s like Liechtenstein declaring war on the United States.

It’s fruitless to waste energy huffing and puffing about CPAs.

As I’ve said numerous times, EAs need to come together under our brand name and extol the virtues of being an EA.

A positive message, not a crabby one. Wasting energy slamming CPAs does nothing to advance the EA designation.

And why not create a positive relationship with other designations? We all have a place in the tax world — whether we’re an EA, CPA or unenrolled.

We’re one big community, not enemies.

Right?

Image courtesy of user PeterDargatz on Pixabay.com

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