I have this serious disconnect with about 15 percent to 20 percent of my client base, and I don’t know what to do about it.
There's one client who I’ve had for many years email me, telling me his wife thinks that we have gotten too big for them and that they are paying too much for their tax returns. Literally, all I do is his companies’ tax returns. He has three S Corporations and his personal. One return is really simple, and the other two require a little more involvement.
I told him that his returns would be about the same as they were the year before — all of which require adjustments to his QuickBooks, which take about an hour to complete and I don’t even charge him for that work. He then remarks that my bills for a particular year were this, then went up to that. The difference was really a couple of hundred dollars. This guy’s adjusted gross income is $250,000, and he is upset over a few hundred dollars?
My wife says that I am pompous sometimes, and, maybe, I am. However, my usual retort to something like this exchange of email ends with me telling the client to go somewhere else. This upsets my wife, and I never hear the end of her saying, “You ruined an 18-year relationship because of your ego.” So, I actually explained what was involved, and that was good enough.
Let me give you an idea of what I've had to deal with regarding fees. I was a partner at a partnership for 18 years. I had a quota. I had to do a certain amount of billable time a week, or else I got fired. I put my blood, sweat and tears into that company. I had all of these great ideas, and they were shot down — over and over again. When the 2008 downturn came, I had to lay off so many people in my department. My other partners never lowered their salaries and would just fire their team. My team had families, and I forwent my guaranteed payment to pay them.
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About Craig W. Smalley, EA
Craig W. Smalley, MST, EA, has been in practice since 1994. He has been admitted to practice before the IRS as an enrolled agent and has a master's in taxation. He is well-versed in US tax law and US Tax Court cases. He specializes in taxation, entity structuring and restructuring, corporations, partnerships, and individual taxation, as well as representation before the IRS regarding negotiations, audits, and appeals. In his many years of practice, he has been exposed to a variety of businesses and has an excellent knowledge of most industries. He is the CEO and co-founder of CWSEAPA PLLC and Tax Crisis Center LLC; both business have locations in Florida, Delaware, and Nevada. Craig is the current Google small business accounting advisor for the Google Small Business Community. He is a contributor to AccountingWEB and Accounting Today, and has had 12 books published on various topics in taxation. His articles have also been featured in the Chicago Tribune, New York Times, Yahoo Finance, Nasdaq, and several other newspapers, periodicals, and magazines. He has been interviewed and been a featured guest on many radio shows and podcasts. Finally, he is the co-host of Tax Avoidance is Legal, which is a nationally broadcast weekly Internet radio show.