Funny ideas: Preparers discuss clients’ misconceptions
What does the average taxpayer think of tax preparers? According to a New York Times 2014 opinion piece, “When you hear the words ‘tax preparer,’ you may imagine a calculator-clutching accountant, carefully scrutinizing receipts beneath a green eyeshade. But the reality is that in most states nearly anyone can be a tax preparer … .”
Such opinions probably fuel a lot the public’s misconceptions of preparers. The biggest wrong ideas? “That … all preparers are licensed,” said Aaron Blau, an Enrolled Agent and CPA in Tempe, Ariz.
“That we are either nerds, geeks, crooks or societal malcontents with no real life,” John Dundon, an EA and president of Taxpayer Advocacy Services in Englewood, Colo.
“That there fees should not ever increase or are always too high,” said William Keats, an EA at Keats Tax & Financial Service in North Merrick, N.Y.
“That all preparers are up to date on the most recent tax law changes,” said EA Chris Hardy at Georgia-based Paramount Tax.
“That we can just click a few buttons and come up with a result!” said Theodore Prioleau, an EA at Hunt Valley, Md.-based Teddy The Tax Man and Hunt Valley Retirements. “We don’t need continuing education. Just click. What’s the problem?”
“That ‘anyone’ can do taxes,” said preparer Marilyn Meredith at Michigan-based Meredith Tax Service.
“Certainly a large contingent believes that there is little value added,” said EA Richard Ogg of The Master’s Tax & Financial Services, in Santa Rosa, Calif.
(A slideshow of the most common misconceptions is available here.)
It’s the software, stupid
The same tool that allows preparers to work most efficiently also colors the public’s perceptions the most indelibly, preparers say.
“I frequently hear the comment that our jobs must be so easy since we have software and computers to do it all for us,” said EA Debra James at Genesis Accounting & Management Services in Lorain, Ohio.
Added EA Twila Midwood at Advanced Tax Centre, Rockledge, Fla., “The public thinks all we have to do is push a button in the software and voila! a return appears.”
“A tax professional shouldn’t rely on software to do the work,” said Laurie Ziegler at Sass Accounting, Saukville, Wis. “[Preparers] should know what to expect for results and be able to do analysis as to whether or not the outcome is as expected. We also have the ability to do tax planning and consider what-if scenarios.”
Jeff Gentner, an EA in Amherst, N.Y., spends the time with many clients “explaining how the software is only as good as the preparer who knows what questions to ask and how deep they need to probe to make sure that they report complete and accurate information. My clients are interested in getting the most out of their tax preparation and do not want to miss any opportunity for tax savings. They’re also aware that tax laws change yearly and they count on me to keep current … I know they appreciate and rely on it.”
Can the filing public be educated on the subject? Said Nicole Green, an EA at NGG Tax Group, Easton, Md. “One of the factors that leads to this [data-entry] misconception is that, unlike other fields where someone is required to get training and licensed, a tax preparer can just open shop with absolutely no training.”
The public doesn’t “know the education and administrative side,” Midwood said. “Hence the need for our engagement letters and detailed questionnaires.”
Said Terri Ryman, an EA at Southwest Tax & Accounting, in Elkhart, Kan., “I try to educate each person. I explain that tax return preparation is much more than copying their information onto a screen.”
“Most of the population has decided that no matter where they go, all preparers are equal,” said Jennifer Brown of Implex Tax & Accounting, in Clearfield, Utah. “They need to not just randomly trust [but] ask questions. They also believe that a tax preparer is too expensive.”
Sometimes taxpayers think it’s not what a preparer knows but who a preparer works for. “I believe that a vast majority of my clients believe I am actually with the IRS,” said Frederick Reynolds, an EA with H&R Block in Utica, N.Y.
Morris Armstrong, an EA and registered investment advisor at Armstrong Financial Strategies in Cheshire, Conn., thinks the public might believe preparers are actually part of the IRS and do taxes as a courtesy. “The moment that my fee is mentioned,” he said, “I’ve heard the remark about it being a government service, or why should someone have to pay to file the taxes?”
Enrolled agents seem mysterious to a public that doesn’t realize what education maintains the credential, said Stephen Mead, an EA in Bradenton, Fla. “People think they understand what a CPA is and assume they are the high-end of tax expertise,” he said. “Since most people haven’t had any troubles with the IRS, their biggest misconception is also that they have the ‘best tax preparer in the world,’ evidenced by a lack of issues.”
Said Joel Grandon, an EA in Marion, Iowa. “The public seems to think that chain prep firms are cheaper than accountants when it comes to tax preparation. They see the credentials of CPA, EA, ATP, or something similar and think that it’ll cost more.”
And don’t forget: The job’s a breeze after mid-April no matter the credentials. As clients often ask Marilyn Heller Ayers, CPA in Brick, N.J., “‘What do you do the rest of the year?’”