Lessons from Another Difficult Tax Season

We are amid our third difficult tax season in a row: 2020 gave us the Families First Coronavirus Response Act and the CARES Act; 2021 gave us the Consolidated Appropriation Act, 2021, and the American Rescue Plan Act; and 2022 continues the aftermath of all these tax laws. We had late and changing guidance interpreting and implementing these provisions. Forms and schedules that we need to file client returns are delayed well into tax season.

I do not know if our businesses will go back to normal, nor do I know if we, as an industry, should even consider going back to normal.

Here are four practices that I believe we need to integrate into our tax season model going forward:

1. Make time for education. Education is no longer just an off-season activity – we need to make time for quality education year-round. This is especially true as tax season becomes more complex with last-minute or retroactive law changes as well as evolving or changing Internal Revenue Service (IRS) guidance. You serve clients best when you learn in real time.
2. Incorporate paid ongoing advisory services into all engagements. As the tax law gets more complicated, and more benefits are administered through the tax law, most clients will need some type of advice after preparing their return. We should encourage people to ask advice before acting! As such, engagement letters should clearly define the scope of advisory as well as build the cost into the tax preparation pricing.
3. Problem clients are not worth the revenue. You will find most of your tax season problems are caused by a small number of clients. They distract you from your goals and waste the energy you could be devoting to clients you like to assist. Do not just raise their fee and hope they leave – actively disengage from clients who cause personal distress or interfere with business operations and goals.
4. Extensions are normal practice to distribute workload. Do not kill yourself with overwork in a narrow timeframe – it is not good for your health, and your clients do not receive the attention they deserve. Use extensions to more equally distribute workload so that you do the best work you can for your clients. Set that expectation clearly upon initial engagement by establishing firm deadlines stating that only complete files
   received by a certain date will not require an extension.

In closing – we are always looking for content! Before submitting an article, please contact me to let me know what you would like to write about so we can work together to make it the best it can be. My email is tom@gtax.biz. Thank you!