Monday, May 25, 2009

WORDS OF WISDOM

I just couldn’t wait until Saturday’s WHAT’S THE BUZZ to tell you of Trish McIntire’s excellent, well-written post titled “It's Not Easy” at OUR TAXING TIMES.

In the post Trish says, “I have seen an increase in clients switching to online or box tax software and preparing their own taxes.” She is not concerned about losing clients in this matter, as she will “get new clients to replace them”. And, as she says, “sometimes they come back”.

Over the years, both in my mentor’s tax practice and in my own, we have lost clients for a year of two for a variety of reasons. This was before “the box” (packaged tax software) or online preparation was available.

Sometimes we were truly glad for the loss of a particular client. In most cases they would come back – generally due to the level of quality of the service (low) and the cost (high) of other preparers (CPA and “fast-food” chains alike) that they encountered. We referred to them as “lost lambs” and always welcomed them back into “the fold”. Actually my mentor said that every client should “stray” for one year so they would truly be able to appreciate our superior level of service and extremely reasonable fees.

But that is not the real issue of her post. “The real problem {with those who turn to packaged software or online services is} the taxpayers who don't want to do the homework necessary to do the job correctly.”

It isn't just taxes. You see the same issue in bookkeeping, playing the stock market, starting a business or taking a vacation. They learn enough to be dangerous. When they run into a problem, they ignore it or patch over it. They don't prevent or solve the issue. How many businesses die because the owners don't really understand payroll, labor laws, health laws or something easily preventable? How many vacations are a disappointment because the trip planner didn't check on attraction times or what the weather is usually?

And, the heart of the matter, “How many taxpayers have received a heart stopping letter from the IRS because they didn't fully understand what the software was asking?"
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Trish’s excellent bottom line – “Just because there is a computer program or app that will help you complete a task doesn't release you from making sure you understand the choices you make with that program.”
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In his post “E-file Hits Record 90 Million” Bruce the TAXGUY reports that, “By April 24, the IRS had accepted 31.2 million returns filed from home computers, up 19.3 percent from the same time last year.” That is an increase of more than 5 Million “self-prepared” returns using tax software or an online service. That means 5 Million+ more potential incorrect returns for the IRS to deal with.
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When I say this it is not because I am looking for new 1040 clients, because I definitely am not, but because it is the truth – Paying a competent tax professional to do your return is ultimately much cheaper than taking a chance with a tax software package or a cheap online service!
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TTFN
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PS - Happy Memorial Day!

1 comment:

Monica Lawver said...

I completely agree. I don't go to a website to diagnose a complicated illness. I recognize the need to hire a professional with the necessary experience and expertise!