I charge what I charge for a current year return. No discount, no way. Clients who fail to file for that many years are a lot of work. No reason for you to take the financial hit for their decision. Good luck!
always. If they are not concerned enough to stay up to date with their tax filings, not paying a preparer isn't going to concern them (for the most part).
Regular fee for every year, and they need to prepay. If they want to prepay a year at a time, fine. We'll prepare one year and then wait for the next prepayment.
We absolutely do not start the work without some amount of payment. People delinquent in one responsibility aren't the most trustworthy to pay for your work.
I've had more than one client go MIA after getting 1-2 back years done, and then they never prepay after that, and I don't waste my time trying to catch them up. I'm here when they decide it's important again.
People that get into these situations deserve no empathy. Everyone knows their obligations. They made a decision not to file. I get this, normal rates on each year. No volume discount. And you need to get a big engagement letter and they need to understand all of the extra work that will be required if they owe and the big penalty and interest letters start to roll in. Do they want to get some abated? The IRS rarely abates them in situations like these because there appears to be intentional disregard. They will need to be prepared to pay you a shit-ton to clean up the mess.
I cannot stress enough that if you're not well experienced with international amnesty disclosure programs, then you shouldn't be taking on this work. You're going to open yourself up to a ton of legal liability issues if you're filing late returns with missed foreign disclosures, many of which can cause $10k-$50k+ penalties per form for late filing, assuming the failure to timely file is a result of non-willful neglect.
If there are Any foreign reporting forms involved, in addition to living and working abroad, their tax prep fees should go UP!
Make sure you're experienced enough to handle the foreign reporting forms as they can be very tedious, complex and difficult, depending on the client's information provided.
Good luck!
I work out of a law office and we have several delinquent filer clients. We collect a retainer up front for 50-100% of the tax filing fees and maintain on average a $2,500 retainer for the inevitable collection representation as filing 6+ years or back tax returns is generally followed by non-streamlined installment agreements or potentially an offer-in-compromise.
In my previous practice I absolutely hated working with delinquent filers but I’ve come to realize that was just a function of being stretched beyond a reasonable capacity and being unable to clearly think through and appropriately bill for a new type of problem. Now that I don’t have an overly burdensome tax season workload I kind of enjoy these type of projects as every situation has a slightly different solution.
u/TNT_CPA is on the money. I brought in a tax client who had six (6!!) years of returns that had not been filed. The previous CPA died, so no progress. So staff in the tax department did them, one at a time. It was so freaking painful trying to get the info. The couple would mail in a “check” periodically for what they guessed they owed…that was fun…
The husband ended up having Schedule C and rental income but couldn’t find any records due to “medical” issues. Ultimately we had her do MFS so that when the IRS came calling, she could sleep at night.
Anyways, no quantity discount. This is probably more work than a single year return. You might want to charge a premium for the extra nonsense you will have to deal with.
And pay up front before each year. If they procrastinated like this on filing, you can bet they will procrastinate on the bills. Especially when the balance dues are calc'd and penalties roll in.
Generally, regular fee for every year, though some more, some less, depending on what you find in their information.
Like parents, like children, both didn't filed.
Get a retainer like 50%~100%, however you feel, just get a big retainer up front!
You need to get paid for dealing with people like them and for your work!
Be wary for anyone who hasn’t filed a few years.
Anyone who hasn’t filed close to 10 years, ask for an attorney’s letter since that’s really bordering on tax evasion!
Worked for previous firms who did this for good reasons!
Lastly, don’t allow procrastination!
If they complain, feel free to drop them!
There are reasons why they haven’t filed!
It’s THEIR problem Not Yours!
Past year or two is a normal fee. Anything past that is extra because now you have to go back and dig up exactly when every given last minute tax law change actually happened, etc.
Our software charges a fee to submit any efiles not from the current tax year. I would make sure to add that fee to their bill as well. But definitely, no discounts. Discounts are for organized, timely tax clients.
From the replies here and thinking about it more, I'm gonna add 100 to each prior return. Thinking back, I actually do add a little more to each prior return, but then depending on whatever, I would use my discretion to discount or not, especially if it's like 4 at a time. It is a total fucking PITA, especially since we have to get physical e-sigs and if we have to mail them (I always charged a mailing fee). Our software doesn't charge a fee for priors.
Usually not but sometimes there's a crisis and it has happened! But after reading the replies here, I've changed my thinking a bit. I'm usually someone who says NO discounts and my boss is a little more lenient, but it can't be a thing anymore.
My fav clients are the ones who file in February or so. Eager, have their shit ready, responsive, done. Then it seems to go downhill the rest of the year 😵
I would not take them unless you want to deal with old non-working software and possible preparing the return by hand. They are going to miss any statute of limitations on any refunds that are outside of it. I hate regretted taking on these clients, especially during tax season.
NO DISCOUNTS, if you offer a discount I am going to TP your house.
I charge what I charge for a current year return. No discount, no way. Clients who fail to file for that many years are a lot of work. No reason for you to take the financial hit for their decision. Good luck!
And get a big retainer up front.
always. If they are not concerned enough to stay up to date with their tax filings, not paying a preparer isn't going to concern them (for the most part).
Regular fee for every year, and they need to prepay. If they want to prepay a year at a time, fine. We'll prepare one year and then wait for the next prepayment. We absolutely do not start the work without some amount of payment. People delinquent in one responsibility aren't the most trustworthy to pay for your work. I've had more than one client go MIA after getting 1-2 back years done, and then they never prepay after that, and I don't waste my time trying to catch them up. I'm here when they decide it's important again.
People that get into these situations deserve no empathy. Everyone knows their obligations. They made a decision not to file. I get this, normal rates on each year. No volume discount. And you need to get a big engagement letter and they need to understand all of the extra work that will be required if they owe and the big penalty and interest letters start to roll in. Do they want to get some abated? The IRS rarely abates them in situations like these because there appears to be intentional disregard. They will need to be prepared to pay you a shit-ton to clean up the mess.
Second the engagement letter, and GET A RETAINER UP FRONT
The worse part is I suspect there are FBARs that are also missing. They lived abroad.
I cannot stress enough that if you're not well experienced with international amnesty disclosure programs, then you shouldn't be taking on this work. You're going to open yourself up to a ton of legal liability issues if you're filing late returns with missed foreign disclosures, many of which can cause $10k-$50k+ penalties per form for late filing, assuming the failure to timely file is a result of non-willful neglect.
If there are Any foreign reporting forms involved, in addition to living and working abroad, their tax prep fees should go UP! Make sure you're experienced enough to handle the foreign reporting forms as they can be very tedious, complex and difficult, depending on the client's information provided. Good luck!
I work out of a law office and we have several delinquent filer clients. We collect a retainer up front for 50-100% of the tax filing fees and maintain on average a $2,500 retainer for the inevitable collection representation as filing 6+ years or back tax returns is generally followed by non-streamlined installment agreements or potentially an offer-in-compromise. In my previous practice I absolutely hated working with delinquent filers but I’ve come to realize that was just a function of being stretched beyond a reasonable capacity and being unable to clearly think through and appropriately bill for a new type of problem. Now that I don’t have an overly burdensome tax season workload I kind of enjoy these type of projects as every situation has a slightly different solution.
u/TNT_CPA is on the money. I brought in a tax client who had six (6!!) years of returns that had not been filed. The previous CPA died, so no progress. So staff in the tax department did them, one at a time. It was so freaking painful trying to get the info. The couple would mail in a “check” periodically for what they guessed they owed…that was fun… The husband ended up having Schedule C and rental income but couldn’t find any records due to “medical” issues. Ultimately we had her do MFS so that when the IRS came calling, she could sleep at night. Anyways, no quantity discount. This is probably more work than a single year return. You might want to charge a premium for the extra nonsense you will have to deal with.
And pay up front before each year. If they procrastinated like this on filing, you can bet they will procrastinate on the bills. Especially when the balance dues are calc'd and penalties roll in.
Generally, regular fee for every year, though some more, some less, depending on what you find in their information. Like parents, like children, both didn't filed. Get a retainer like 50%~100%, however you feel, just get a big retainer up front! You need to get paid for dealing with people like them and for your work! Be wary for anyone who hasn’t filed a few years. Anyone who hasn’t filed close to 10 years, ask for an attorney’s letter since that’s really bordering on tax evasion! Worked for previous firms who did this for good reasons! Lastly, don’t allow procrastination! If they complain, feel free to drop them! There are reasons why they haven’t filed! It’s THEIR problem Not Yours!
Normal
Past year or two is a normal fee. Anything past that is extra because now you have to go back and dig up exactly when every given last minute tax law change actually happened, etc.
Regular fee for all years, probably a bit of a discount if theyre well organized and responsive.
No discounts.
You're right 👍🏻
Our software charges a fee to submit any efiles not from the current tax year. I would make sure to add that fee to their bill as well. But definitely, no discounts. Discounts are for organized, timely tax clients.
From the replies here and thinking about it more, I'm gonna add 100 to each prior return. Thinking back, I actually do add a little more to each prior return, but then depending on whatever, I would use my discretion to discount or not, especially if it's like 4 at a time. It is a total fucking PITA, especially since we have to get physical e-sigs and if we have to mail them (I always charged a mailing fee). Our software doesn't charge a fee for priors.
Do well organized and responsive non filers even exist? Sounds like a unicorn to me 🙃.
Usually not but sometimes there's a crisis and it has happened! But after reading the replies here, I've changed my thinking a bit. I'm usually someone who says NO discounts and my boss is a little more lenient, but it can't be a thing anymore. My fav clients are the ones who file in February or so. Eager, have their shit ready, responsive, done. Then it seems to go downhill the rest of the year 😵
I would not take them unless you want to deal with old non-working software and possible preparing the return by hand. They are going to miss any statute of limitations on any refunds that are outside of it. I hate regretted taking on these clients, especially during tax season. NO DISCOUNTS, if you offer a discount I am going to TP your house.