For most of my clients, there are three words that upset them; Audit, Fee-Increase, and Extension. I know one of them is hyphenated – just go with me on this.
Audits are out of my control for the most part. You do a good job submitting the data, we do a good job interpreting and presenting the data, and hopefully the IRS is pleased and moves on to clients with dependents named Astro.
Fee-Increase is also something I have very little control over. We bill by the hour; that is the product we are selling – our knowledge doled out in increments of time. Have you seen the tax law changes we have to learn? A client recently told me that my fee was higher than her refund. Think what would have happened if she owed??!!
Extension, just like the word “Port-A-Potty,” has a negative connotation but can be very useful at times. Without extensions, we would be unable to process all the returns of our clients. I’ll let you decide what would happen without Port-A-Potties.
Close to 600 of our clients ask for extensions each year. Some because they just can’t seem to find the energy to address their filing needs by April 15th. Some extend because information they need will not arrive in time to file. And finally, some extend just because they don’t particularly like to be told when to do something by big brother.
The truth is we encourage extensions – they are our friends. The key to filing an extension is to make sure you will not owe any more money after April 15th; the extension only applies to filing your return, not to owing the government money. When you do get around to filing, if there is still tax due, the IRS will charge you penalties and interest. This is why extensions should not be performed by the untrained!!
So, scream about Audits; shed a tear for our fees; but embrace extensions!
Thanks for listening and I will talk at you next week.