Art of Accounting: Accountants’ delinquent tax filing

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Accounting firm owners and partners who did not get their own tax returns in on time face losing their licenses, being expelled from their professional societies, losing their livelihoods and possibly being imprisoned. The embarrassment from public disclosure will be a mere trifle compared to the foregoing.

I know some non-filers who actually told me, “It’s not a problem since I overpaid and would be getting a refund.” Also, if you did not file, you would not be able to get a PTIN since one of the IRS questions asks if you filed every return you were required to file.

There are many reasons — and even some that might make sense — but the bottom line is that there is no tenable reason for a tax professional’s failure to file. Further, if the non-filer is a partner in a firm, particularly a large firm, the announcement by the IRS could cause considerable embarrassment to every member and employee of that firm.

There is a simple solution — get it filed ASAP. Stop being a jerk!

Call clients you know who have not filed and read the riot act to them. If you have a small practice, I suggest advertising for clients who have not filed this year’s and prior-year returns. Try some small ads for a few weeks and see what happens. There are many people who have not filed for multiple years and this can be added revenue for your firm. Also, this is the type of work for which you could estimate the fee in advance and get paid up front. If you work for these type of clients and extend them credit, you deserve to get stuck.

I wrote an earlier blog post with additional information about non-filers.

As always, do not hesitate to contact me at emendlowitz@withum.com with your practice management questions.

Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, and “Managing Your Tax Season, Third Edition.” Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com along with the Pay-Less-Tax Man blog for Bottom Line. Ed is an adjunct professor in the MBA program at Fairleigh Dickinson University teaching end user applications of financial statements. Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 743-4582 or emendlowitz@withum.com.

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Tax debts IRS Tax practice Ed Mendlowitz E-filing PTIN