Should I Look for a New Tax Professional?

Question

Recently, I received a rather rude email from my tax professional in response to an email I sent that simply asked clarification regarding a 1099. In short, he said he did not want to continue emailing me if he was going to file the 1099 anyways and that telling me the rules is "burning time for nothing" (his words).

By the way, I emailed him twice and his emails were literally 2 sentences in the first email and 4 sentences in the 2nd email where half was used to tell me that it was a waste of his time. Seriously? I see comments on BP articles that are more detailed and helpful.

I should mention, this guy has prepared me and my wife's tax returns for the past 2 years. Before then, we've always just filed them ourselves. While he's very knowledgeable, owns real estate himself, and has pretty fair fees, he can really improve on helping people better understand their taxes.  I like to be proactive, but if my own accountant discourages me from asking questions, is this enough of a reason to look elsewhere?

This also got me wondering, what sort of working relationship do people have with their accountants? Do most of you communicate by email, phone, face to face? Or do most questions require scheduled meetings? Are they responsive to such questions or is it dependent on whether they are charging you or not?

Curious to read what the norm, if any, is out there. Thanks.

Brandon Hall · Answer

Charging by the hour is an outdated practice. I could charge the second I pick up the phone or open your email, but that doesn't encourage questions from the client and the advice usually isn't worth charging for as the client is asking high level and vague questions.

As @Michael Boyer mentioned, my time is finite and I have a lot of clients. To get around my philosophy on avoiding hourly billing but recognizing the need to protect my time, I give my clients a free 20 min on the phone or email questions. This encourages communications and questions from the client.

I know that at the end of the day, the lifetime value of my client is worth a massive amount more than charging those 20 minutes and potentially upsetting and losing my client. Not all CPAs think like that though.

Those who charge hourly don't understand the value they are adding to the client. They are charging based on their cost basis which puts the focus on the service provider, not the client satisfaction and value add. In fact the only time I've charged hourly is when phone calls exceed 20 minutes or I receive a one off project where I can't feasibly determine the value it would add to the customer.

Hourly billing is the lazy way to bill :)

Mike F. · Answer

Hourly billing is a two way street, it's typically done for cheap clients who want fixed prices for certain things that are finite like filling a tax document. When you enter into a relationship like that the accountant is only getting X amount of compensation for doing a specific task, when you need more of their time they have to figure out how to be compensated for it.

My CPA has been with me for 18 years, long ago we established X compensation for X fixed items, and she billed hourly for anything additional, after a couple of year I asked her to come up with a number that she thought we be fare to cover some extra amounts of her time that I would use each year through questions, emails etc that would be normal over a year based on the last few years, she came up with an additional amount, say just for example $400.00. We agreed she would just add the $400 on her billing. This worked out much simpler as she wasn't having to bill me every time we used her time with a phone call, she got a fixed known amount she thought was fare, some years I might use an actual additional $600 of her time other years maybe its only $200, but the billed $400 made sense to us both, it averaged out, it simplified everything.

Let's face it service professionals are going to bill your for their time one way or the other they can bill you for each minute you use or they can add a number to a fixed cost item, they are going to get it from you one way or another, just find a way that works comfortably for you both.

I personally found the hourly additional billing tedious and made me feel rushed and on the clock every time I had to call her. The additional stipend just simplified things for us, it might not work in your case, or it might, up to you and your accountant to decide. If both of you are nit pickers it probably won't work as neither will be satisfied with the fixed amount, I tend to err on the side of my vendors, I don't step over dollars worrying about pennies so I'm fine to give a little more in the way of compensation today as I know the long run is all that matters, and seriously in the big scheme of things if $100 or $200 one way or the other over a year for a trusted person on your team makes a difference you probably have far bigger underlying problems.

Mike F. · Answer

Accountants like lawyers typically value their time on an hourly basis, some simply charge by the hour and some charge based on an estimated block of hours you will require and they will need to service your account.

So what is your arrangement with your accountant, are you monopolizing his time without him being compensated? Are you on a fixed fee basis or does he bill your for his time with you?

If you believe he is being compensated in your arrangement then he sounds like a dick. If you're monopolizing his time without him being compensated I can understand his frustrations, but it would be more professional to just explain it to you and adjust compensation.

Steven Hamilton II · Answer

We get a lot of repetitive questions this time of year and keep in mind we were extremely busy with the holidays as well, it can become a burden to take it all on at once. I've been there before I'd voice your concern to him, they may be in the middle of taking care of a sick loved one or balancing the kids and traveling. My phone for instance has been ringing off the hook since the week before new years. I communicate a lot via e-mail and take a just the facts stance, but I do encourage the questions. I just had to reschedule an appointment I almost took at 10pm tonight, because I'm just plain too exhausted to process that after the long day. There really is a transition from the holidays and getting the kids back off to school to back to work again.

I had a client CALL me twice this holiday weekend on Sunday at 10 PM. They didn't leave a voicemail either. When a client sends an email ON the holiday, it does tend to bother me especially if they are looking to meet that next day.. I'm not necessarily going to see it until that business day. And that is the reason I have a digital appointment calendar so clients can set their own appointment time.

My point is, discuss your concern. I won't argue he was unprofessional; however, I also don't know what your emails were either.

Michael Boyer · Answer

I suspect good ones will be booked now till April 15th, so you may or may not want to change now..

Just a brief idea on professional services generally......

Are you paying hourly for the advice or looking for it free as an add on for doing the taxes. If you are paying hourly for tax advice and not getting it, maybe look elsewhere. If you are thinking he should answer questions year round in depth for free as part of the fee for doing your taxes, that may be a stretch ...(Keep,in mind he may have hundreds of clients and all he has to sell is his time, which is finite, and his expertise, so asking for both without remuneration may run afoul of the norms in professional services)...the BP cpa and tax folks are most gracious and I hope they get some leads from their free work here and they may have spoiled us taking on complex, tricky tax questions for free in real time (but note even they have been quiet lately probably buried under 2015 taxes)...

Maybe see if you can work out an hourly rate for questions and consulting in addition to the return fee if you think it may help the relationship... Best of luck..

O'brian R. · Answer

That's quite a nice arrangement. Thanks for sharing.

Jeff B. · Answer

You want others to respect your time and privacy - - learn to give that to others, especially the professionals whom you depend upon.

Use email for simple QnA, never use texting, call only when your house is on fire. Email allows the issue to be time-shifted to non-critical time, non-client consultation hours.  The others are rude and are 'a demand for an immediate response'.

If you have a serious, complicated issue that has a convoluted if-then-omg-what-if style of discussion, then schedule an appointment and pay for the consultation time.  You will get a better, more complete answer too.

Steven Hamilton II · Answer

I cringe when I see things like that.

There are times and places for hourly billing. Such as certain projects. I like to make things as easy for clients as possible. And as @Brandon Hall said, we want to encourage interaction with our clients. I'd rather have 500 clients I talk to regularly than 1500 that I see once per year.

Brandon Hall · Answer

So it's definitely outdated - but would you call a business owner who doesn't adapt his business to changing environments lazy? I probably would :)

O'brian R. · Answer

Couldn't agree more!

Re hourly charging...I don't know if I'd call it laziness or just that he's been practicing for 30 years. I mean, he actually still uses an AOL email address.

Should I Look for a New Tax Professional?

Should I Look for a New Tax Professional?

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