If You’re Anything Like Me During Tax Season …

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If you’re anything like me, you were sitting there waiting for e-file to start on Jan. 23. This must be what IndyCar drivers experience before a race. We have made our way to the starting line.

If you’re anything like me, you’ve downloaded your tax program and transferred all your clients over. We have tested different things within the tax system. For example, we are using an electronic method to send our engagement agreement, e-organizer, and our electronic collection system of information statements. It has been tested and our engines are revving. Maybe we will look back on this article as the quiet before the storm.

If you’re anything like me, there are things you hate most about tax season. I have these “friends” who normally don’t contact me all year. But now they are sending me text messages, asking how things are going and wanting to have coffee, dinner, or whatever else gets us to the subject of talking about their tax return. My wife’s family is huge, and they start contacting her and eventually she’ll be asking me the most bizarre questions that you can think of.

Then there’s the time constraints. What we are expected to do in the next four months is insane. I will get at least 300 emails that need an answer per day, as well as phone calls, appointments, and even text messages on a Sunday when I am relaxing. It’s complete madness.

I will have clients text me their W-2 forms. I then ask them to email me their forms, and I receive a picture. I then send that to my wife who converts it to a PDF file. Just an FYI, I have 4,000 clients. I have to keep a record of everything that I do. Sending me W-2 forms, IRS notices, and other things via text just creates an extra step for me.

I am well-aware that sending a PDF is antiquated. My son is a freshman in college and has decided to major in accounting, and we hired him as an intern. I told him on day one that we were “cutting edge” in our field, but that the industry itself was old-fashioned. I think tax accountants are the true reason the US Postal Service is still alive and kicking. I have to respond to IRS notices and send those responses certified with a return receipt. And I send out letters all day, every day, it seems. I even have to maintain a fax service for powers of attorney and forms 8821 and 2553, among others. Faxes are obsolete – unless you are a tax accountant.

If you’re anything like me, you still remember Electronic Account Resolution. On a Sunday in my pajamas, I could send a secure email to the IRS regarding my client. I would get a response and then reply to that response until the situation was resolved. This was the greatest thing in the world for a tax accountant. Not to mention that I could have my client electronically sign a power of attorney or Form 8821 and get immediate access to the client’s files. Why was this done away with? I honestly don’t get it.

If you’re anything like me, you are still the youngest accountant at conventions. Even at 44 with a touch of gray, I scan the room at these events looking for the youth of this profession. I think I was the only one that ever used Electronic Account Resolution. In fact, I belong to a group on Facebook full of accountants, and just last week, there was a discussion about upgrading from Windows 8 to Windows 10. With apparent reckless abandon, I upgraded the day Windows 10 was available.

What can we do to jazz up our profession so the younger generation will be attracted to it? I specialize in taxation. I had two paths that I could have taken: become a CPA or become an enrolled agent. I chose the latter. I added a Master of Taxation as an additional touch.

Recently, I was driving for Uber, and I picked up a college student who was an accounting major. She had just taken an audit class and was sure that she was going to specialize in audit. She was taking a tax class the next semester and asked me why I specialized in tax. I told her that there is only going to be one answer in audit, and it always has to be the same answer. In tax, it could be many different answers, and depending which strategy you use, you could save a client a ton of money. Audit is just compliance. Tax has an element of compliance to it, but once you understand it, you can really save someone a lot of money.

This is my 23rd tax season. I tell my wife that people only think about tax professionals during this time of year. I met with a potential new client back in June. I analyzed his previous tax returns and devised a strategy for him to save money. This analyzation and strategy came complete with a proposal for services. Back in June, we got as far as me sending him an engagement agreement. I never heard back from him, even after I followed up a couple of times.

About two weeks ago, he sent me an email wanting to know what it would cost to do his tax returns. I pointed to the proposal that I had already sent him and added that he was going to have to pay us a lot of money to recompile his information and fill out some forms. Is that what most potential new clients think of us?

Typically, when I first meet with a potential new client, I try to impress on them that taxes are a year-round thing. Our company performs accounting services, where we automate the accounting process for the client, and once a quarter I devise a tax analysis where I formulate different ways of saving my client money. These analyses are different for each client – they aren’t boilerplate. I think that is the reason clients pay us. For many years, I was a partner in a firm that just focused on compliance. While compliance is certainly important, I make my money by saving clients hundreds of thousands of dollars.

If you’re anything like me, you hate the question, “What do you charge?” It sounds simple enough, but it has several moving parts. For tax returns, I charge by the form or schedule. I give my clients a range, but it is never exact. We haven’t even discussed business returns that require accounting work. If the company isn’t a monthly or quarterly client, then we have to charge for the amount of time it takes to put that information into a format where we can use it for the tax return.

If you’re anything like me, you will push off everything regarding your health from January to May, and again from August to October. I read an article back when I first went into this crazy business. It was in the EA Journal and it talked about a tax accountant who was having mild chest pains during tax season. His wife begged him to go to the doctor, but he was too busy and didn’t go to get checked out. His pains got more frequent and harsher, and his wife begged him to go to the doctor – she even made appointments that her husband didn’t keep. He pointed to his schedule, saying that he was just too busy. He ended up dying.

I probably need a lower back surgery very soon. I have decided to have a series of injections that should mask my chronic nerve pain to get me through tax season. This will be my third surgery, if it happens on my lower back. The problem is that I’ve had these injections before and each time I was rushed to surgery as a result. If that happens again, I will be having surgery in the middle of tax season. My last surgery took 30 days of recovery time in a hospital bed in my living room. I have bookkeepers, but I believe in personally doing all 4,000 tax returns per year. I guess I might be filing a lot of extensions.

I will leave you with this: Tax season is an ebb and flow of a manic-depressive cycle. I start off with high energy and I’m ready to go. I begin working 100-hour weeks, sometime after Martin Luther King Jr. Day. I begin seeing clients, taking tons of phone calls, and answering emails, texts, and portal messages. Around the end of February, I usually hit a wall. I’m tired and I slow down a little, just ahead of the corporate deadline. The first week of March is a busy week of people scrambling to get all their documents for their business tax returns. Once the second week of March rolls around, I get my second wind. The corporate due date comes and goes, and it slows down a little bit. At least that is what I am counting on.

The first round of the NCAA tournament is being held in Orlando this year, so my son and I are going to play hooky from work for four days. Yep, during tax season! After this break, it will get busy again for the first week of April, highlighted by what I refer to as “The Day of the Crazies.” On that day, I get the most ridiculous requests and hear from clients who have been out of contact for years. It’s almost like a bomb goes off at the office, and my day ends with me in the bar downstairs from my office, screaming mercy and downing double Scotch and sodas.

After my wife retrieves me from the abyss and dusts me off, I begin to get so tired that I can’t think, and everything is put on automatic. I tell my assistant to hold everything that isn’t essential until after tax season. I make it to the end, sleeping in three-hour shifts for a month: working eight hours, then sleeping for three hours. The first day directly following the end of tax season, I sleep for what seems like days.

This is only one tale of tax season. What is yours?

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About Craig W. Smalley, EA

Craig Smalley

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.


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By RitaE
Jan 30th 2017 17:55

I've been doing this for over 35 years...started when I was 12. Ok, I started when I was 20 and in college.
Like you, Craig, I think I am cutting edge. Everyday I'm reminded that I am not really.
I do have to say that you should get rid of your fax machine. I use efax. My faxes come to my email address and I can send faxes through my online account by choosing the files from my computer.

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to RitaE
Jan 31st 2017 17:32

We use efax as well. The point is, they are obsolete

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