Learn To Say No

Over the tax season the news was filled with articles of tax preparers gone bad; individuals and businesses that prepared fraudulent returns and ripped off their clients. But for all the high profile cases, there are preparers explaining to the IRS (and clients) why they didn’t to their due diligence or allowed deductions they knew were wrong. I don’t want to preach but some recent incidents in my office have again shown that the best defense a tax pro has is the ability to say no.

I was lucky when I started out; I worked for a national firm that required all returns be checked by another preparer. Even as I gained experience and tax knowledge, most of my returns were sent to the “checker”. It was good to have another set of eyes on the return and it made me ask questions so that I could explain my decisions to the checker. When I opened my own practice, I occasionally wished I had a checker to run a return by or a boss to hide behind when I had to say “no you can’t take (expense).”

Most clients are great. You explain why an expense isn’t allowed and they except it even if they don’t like it. But they will always be those who will argue with you, make all kinds of rationales why you’re wrong (all the contractors I know take that off on their taxes) and even threaten a little or offer to slip you something under the table. And there are external pressures of having your own bills to pay and not wanting to lose the fee. But if the client won’t back down and let you follow the Code, don’t do the return.  

I know that it’s hard to lose a client because you chose to follow the rules. And yes, there are a lot of people cheating on their taxes and the chances of getting audited are slim. But some do get caught and you will be the one the client will blame and the IRS will watch  more closely. I had a college professor who announced at the first class that he was open to bribes but since he would get caught and lose his livelihood the bribe would have to be big enough to support his family for they rest of his life.

So, the next time a client pushes you to allow something you know isn’t right ask yourself if the gain is worth the worse case scenario.

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