Are You A Complacent Tax Professional?

Many tax preparers are complacent, and many are finding out that it is no longer business as usual. Processing reports being released by the IRS show a small drop in the number of returns being processed by professional tax preparers and an increase in the number of self-prepared returns. For years, the number of returns prepared by professionals has been on the increase. Could this signal a change?

The jury may still be out because of two factors. The first factor is that the one-week delay in the start of tax season has pushed the tax professionals’ appointments off a week or so, and they may catch up as time goes on. The second factor is that those waiting to file their taxes did so very close to the date that the IRS opened up e-filing for the year, which distorted the numbers between self-prepared and professionally prepared tax returns.  

Professionals need to remember that they have competition, and that competition includes free online self preparation and, of course, Turbo Tax. Those in the tax profession see it over and over again; individuals who prepare their own returns overlook tax exemptions, adjustments, deductions, and credits; as a result, they leave money on the table. Or worse yet, they double up on the depreciation, take deductions and credits that they are not entitled to, and spend the refund. Then when the audit comes, they don’t have enough money to pay their back taxes.

A number of surveys published this year have some preparers complaining about declining business and having to cut their fees, while others talk about increased business and fees. Of course, those with clients with the easier returns are those more susceptible to losing clients to self-prepared returns.

The marketplace and the ways we do business are constantly evolving, and you need to evolve with them. Not to give away my age, but I can remember when the only option was to prepare returns by hand. Next came interviewing on code sheets and processing returns through service bureaus. Then along came the PC, laser printer, and in-house software. Now, we are in the Internet age; with e-filing, taxpayers have all sorts of options to choose from.

So what sets you apart from the all of those other options available to your clients? Well, to start with, the Internet can be your partner, instead of your competitor. You should be communicating with your clients and posting tax blog articles on your website and social media platforms year-round. If you only communicate with them once a year, you are not building a long-term and lasting relationship. You need to keep in touch and ensure that your clients are engaged throughout the year because there are those out there who do, and they will steal your clients away. It is about showing your value to your client base and prospects. By staying connected with your audience, you are showing that you are credible and that they will benefit with you from your skill set.

You can't just sit back and let your practice decline.

  • Lee Reams Sr.

  • Lee T. Reams is the Chief Technical Officer of ClientWhys. He is also an Enrolled Agent having managed a 600-plus client tax practice. Educated as an engineer, with a Bachelor's Degree in Mechanical Engineering, Lee left his engineering career in 1975 to expand his part-time tax practice into a full-time career.

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