December 1998 Issue

It is time, once again, to get ready for tax sea Avoid the Rush Flat Avoid the Rush Flat

By Isaac  Assael and Edwin J.  Kliegman

In Brief

Avoiding Surprises

December is an ideal time to plan for the upcoming tax season. Such planning should include the following:

* Addressing last year's problems

* Making any hardware and software upgrades

* Reviewing standardized letters and forms

* Considering methods of gathering

* Preparing cover letters, labels, and forms

* Establishing cutoff dates

* Instituting a policy for extensions

Staffing needs must be estimated and solutions considered. Policies have to be established for handling overtime, unforeseen crises, staff stress, and weather problems.

The authors also provide some tips on avoiding last-minute surprises for clients and discuss how to market the firm's services during the busy season.

Tax season is never easy. Some unexpected situation, good or bad, always comes up to throw us off our target. What can we do to help ourselves? Here are some ideas to keep focused.


Every pretax season discussion highlights the importance of planning. So does this one. Do it now! December is the ideal time to get most of the clerical, housekeeping, and staffing details out of the way.

Last Year's Problems. Where do you start? If you were in practice last year, you should have a leg up. Ideally, you compiled a list of problems that occurred last year--but, if you're like most of us, you didn't. In any event, you should have a pretty good recollection of last year's shortcomings. Take care of those first.

Hardware and Software. If you have been thinking of upgrading your computer hardware or software, plan to do it before January. You want to be up and running by the new year, free of glitches before the pressures of tax season.

Standardized Letters and Forms. If you use client interview forms or organizers, usually a by-product of the tax software system, there's little to do other than add some customized portions that may be of value to you in your practice. If you do not use interview forms, perhaps you should consider them. It takes a year or two before clients get used to them, but most will begin to appreciate them. The forms serve as a guide for gathering data in an orderly manner, save clients time, and make your life less complicated.

Gathering Information. Most firms process returns based upon a combination of personal interviews and client-prepared organizers. Those who use the interview process may want to selectively consider the time savings available by relying upon the mail. Conversely, those using the mail to receive organizer information may want to consider the lost opportunity of a face-to-face meeting to selectively market some of their other services, such as financial and estate planning. We'll discuss marketing later.

Cover Letters, Labels, and Envelopes. These tools should be prepared in December and be ready for mailing on or about January 20th. That's when clients start getting 1099s and other tax information. Standardized forms, letters, and schedules should be reviewed, updated, and stocked by the end of December.

The Cutoff Date. Establish various cutoff dates for processing returns before the due date at the beginning of the season. Consider follow-up letters and then phone calls to clients who have not made appointments to have their interviews or sent in their material to you by your cutoff date. All clients should know your cutoff date to ensure filing by April 15th. They should know that, unless the information is received by this date, the return will go on extension. The cutoff date is unique to each firm, determined by the lead time needed to complete a return. Don't hesitate to give yourself more time than you think you need.

A Word About Extensions. Some practitioners insist on getting out every possible return by April 15th. There is a price to be paid in added stress to themselves and their staffs, as well as overtime beyond the reasonable capabilities of most people. (Of course, hiring temporary staff can substantially reduce the stress level.) The other side of the coin is that extensions may cause multiple handling of client records along with the attendant additional costs. We suggest setting up a system to minimize multiple handling. A policy of maximum use of extensions effectively extends tax season to October 15th. There is much to be said on both sides, but it really is a personal, firm choice. Either way, you've got to plan your procedure, establish your policy, and communicate it to clients and staff.

Most important, though, is educating your client that extensions, by themselves, do not cause audits by the IRS or state agencies. If clients insist on an April 15th filing, without regard to its impact upon you personally or professionally, consider dropping them as clients.


The number one problem currently facing the profession (and business in general) is people. Right now there is a shortage of qualified people to work, a dramatic change from three to four years ago, when the job market for CPAs was wide open.

Estimate Needs. It's relatively simple to estimate your staff needs for tax season. You know what you've got, you know what you needed last year, and you should be able to estimate your requirements to take care of new clients.

Sources. Explore the possibility of temporary, part-time help. Many experienced accountants are happy to work on part-time or reduced schedules. Seek them out. Today, almost everyone has a computer. Think about using laptops and weigh the possibilities of using people who can work at home.

College juniors and seniors are an excellent source of interns. They are usually bright, eager to learn, and appreciative of the opportunity to work in their future field of endeavor. Interns are easily trainable, computer literate, and willing to take on many tasks.

Overtime. Working overtime is usually a way of life in our profession--especially during busy season. We suggest that a reasonable overtime commitment from employees during the tax filing period is 15 hours per week. There are two schools of thought on whether to set a fixed schedule for overtime. We believe that not only should the number of hours be fixed but also, whenever possible, the days and hours should be set. Employees want predictable hours and predictable work schedules. Changes in either, without regard to their needs, are a sure way to make employees angry and upset and looking for a way out--during or after tax season. Training new staff is time-consuming and expensive.

The other school says that employees prefer to set their own schedules to meet their workload and that staff working under set schedules often make work to fill the fixed schedule.

Handling Crises. When a crisis occurs--as one surely will--it isn't going to go away by itself. There isn't a single solution because every predicament is different. The first solution should not be ordering the staff to put in additional time. Try and get some staff to volunteer to step in; use temps, if possible, even if it may cost more. Contemplate offering an inducement (money, time off, or other enticement) for volunteers. In other words, understand that what is good for your employees might also be good for you.

Handling Stress. It is important to consider the needs of the staff and balance them against your own during a very busy and stressful few months. Some firms have tried a novel approach, with some success. They close the office for President's weekend. It comes at a time when morale is often low, and some replenishment of spirit is necessary. The staff--and you--can come back refreshed and ready to battle.

Weather. Given the season, inclement weather is always a potential problem. Radio and television usually give sufficiently frightening warnings before a storm. You should make arrangements with staff in advance, and communicate what is expected in the event of possible time lost due to weather. Make computers and other material available for staff to take work home. It's not an unreasonable request.

Last Minute Surprises

There are at least two things that drive clients crazy and away from your firm--last minute surprises and errors. If you want to lose clients in a hurry, send them their returns or extensions on the last day for filing. Too often we and our staffs seem to think the job is done when the return or extension gets to the client by the due date. Each time you get returns to clients with less than 10 days leeway, some form of failure has occurred. It really starts by not planning to have all the major work done in a timely manner. It can be avoided by making and adhering to realistic schedules with deadlines.

This concept must be instilled in the firm's philosophy. We have to understand that even the most successful of our clients have to make plans to have funds available. Calling just a few days beforehand to let them know the amount of taxes they owe may create a problem. You've got to keep in touch with your clients about their cash requirements.

You also have to be careful when communicating with the client about the balance due on a tax return. There is a perception of sloppiness when amounts change each time the client is contacted. This can be overcome to some extent by always emphasizing that the numbers are tentative and subject to review or change. Try to avoid any misunderstanding. Don't be afraid to tell your client that his or her failure to get information to you on time is the reason deadlines are not being met or other problems are occurring. Better still, put it in writing.

Make certain that you firmly establish your review procedures before tax season begins. Reviews should be performed as quickly as possible after the work is completed while it is still fresh in the mind of the preparer and he or she is still readily available to make corrections. Careful examination and strict enforcement of procedures will help eliminate costly errors and client dissatisfaction.


Whether you've been in practice for a long time or are just getting started, it is important to realize that the profession is changing. CPAs are following the lessons learned by business. One of these is that marketing is a very important tool in acquiring and maintaining clients.

Before, during, and after tax season, at the interview with the client, and upon completion of the engagement are excellent opportunities to let the client know about the varied services that your firm can provide. Financial and estate planning and succession, retirement, and investment strategies are all within the realm of possibility.

Don't forget the obvious--tax planning for the new year. Depending on the nature of the client and the tax engagement, there may be opportunities to suggest a tax savings bonus. An obvious one is taking advantage of lower capital gains rates or the recent changes to the transfer tax lifetime exclusion. Some firms develop a "tip of the week" to break the ice with clients, which can substantially increase their fees.

Marketing Program. While on the subject of marketing, this might be a good time to begin to plan a marketing program. Most practicing CPAs do some kind of marketing every day, without really thinking about it. It is a natural part of being an entrepreneur: getting new clients, retaining old ones, and trying to keep everyone happy. Tax season is not necessarily the best time to develop a marketing program; there's too much else to do. You can, however, begin to think about a more focused plan.

Referrals. A complaint among older practitioners in particular is that they have not been getting the referrals they used to. Perhaps an informal analysis of what you do to promote yourself and your practice is in order. Have you become complacent and taken your clients for granted? Have you stopped taking your favorite bankers to lunch or cut down on your civic and volunteer responsibilities? If so, begin a personal marketing plan.

Tax season can and should be a good time to get the creative juices flowing. Above all, it's a great time to toot your own horn and, in the process, ask clients for referrals. Clients have business associates, friends, and relatives. During tax season, they brag or complain about how little or how much they pay in taxes. Make sure your clients know they are getting the best tax advice possible, and make sure they are delighted with the service you provide. Whatever you do, do not complain about how busy you are. That gives the impression you have no time for more business. And, if you are late in getting returns to clients, they won't feel comfortable referring you to others. Let clients know that you would be pleased if they would let others know how good you are. That's step number one in getting a personal marketing plan under way.

Marketing Tools. After April 15th, you can avail yourself of a myriad of excellent publications put out by the AICPA and marketing firms to assist you in preparing a successful plan. Most smaller practice units are not willing to spend the kind of money required to retain a marketing firm, but there are some accounting organizations that have developed inexpensive programs and literature. You also might want to consider telemarketing. It's a technique being employed by more CPA firms than you might want to believe. Once you get past an ingrained dislike of the concept of CPAs doing telemarketing, you may come to realize that it is an effective, low-cost method of acquiring new business.

Onward and Upward

Planning ahead will ease the burden, stress, and difficulties of tax season. Remember, if you think that things can get worse, they will. Be calm, be philosophical, and smile once in a while. People will be impressed. *

Isaac Assael, CPA, is with Enwood Personnel & Temporary Service in New York City. Edwin J. Kliegman, CPA, is one of the founding partners of Marcum & Kliegman, LLP, Woodbury, N.Y., and past president of the National Conference of CPA Practitioners. Both are members of the NYSSCPA's General Committee on Management of an Accounting Practice.

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