Early returns: Preparers field clients’ strangest comments

February 19, 2019 9:02 AM

Whoever claimed that kids say the darnedest things was never a tax preparer.

From the secrets of their home life to the starkest examples of mismanaging affairs, clients tend to tell their preparers all – and expect a lot of understanding in return. Here’s what tax pros have heard and how they responded.

Department of the Treasury Envelope with Money Inside Isolated on White Background.

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Sweet memories

“Many clients are expecting the same or greater refunds because of the ‘big tax cut.’” said Jeffrey Gentner, an Enrolled Agent in Williamsville, New York. “Unfortunately, that hasn’t been the case. In fact, the opposite is true since the withholding tables gave them an increase in their paychecks all year. Funny how people forget about that.”

KISS and tell

Any question related to 199A is strange, “as what taxpayers read is never correct or their hairdresser’s cousin’s lawn-care guy told them the wrong thing,” said EA Jeffrey Schneider in Stuart, Florida. “No one understands why some are limited and some are not. I try to KISS [keep it simple, stupid], but with this, that’s almost impossible. I have said, ‘Do you trust me?’ When they answer, ‘Yes,’ I say, ‘Rest assured the numbers are correct and let’s go with the return as is.’”

A printout of Congress's tax reform bill, "The Tax Cuts and Jobs Act," alongside a stack of income tax regulations

Did you hear the news?

“It’s amazing how many people don’t even realize we have a new tax law,” said Lawrence Pon, a CPA at Pon & Associates, in Redwood City, Calif. “Or they quote some amazing misinformation they saw on the internet. I haven’t kept track of the misinformation because I don’t want to confuse my brain.”

How to fail in business without really trying

“‘Why can’t I take a loss? The government says I can take a loss for my first two years in business? The whole reason I started my business was to lose money!’” recalled Debra L. James, an EA at Genesis Accounting & Mgmt. Services in Lorain, Ohio. “You can’t take a loss because your income exceeds your expenses. If you started your business to lose money, you’re not a very good businessperson.”

Last resort: The arithmetic

CPA Bruce Primeau of Summit Wealth Advocates in Prior Lake, Minnesota, had a client looking for more tax write-offs “as they were in the highest income tax brackets and wanted to know what they could do to save more tax,” Primeau said. Up popped the idea of starting a company to lose money. “Needless to say, I quickly showed them how the math doesn’t work. Yes, if you lose $1,000 in a business you would save $400 in combined tax – however, you’re still out the $600.”

Many happy returns

Gail Rosen, a CPA and shareholder in charge in the Somerset County, N.J., office of WilkinGuttenplan, had a client mail their return certified mail, return receipt requested. “We’re now answering the IRS about an issue with the return,” Rosen said. “I told my client I needed a copy of their certified mail proof from the IRS. My client said, ‘You told me to send it certified, return receipt. You didn’t tell me to keep the receipt.’ Turns out when he calmed down, he thankfully did keep the receipt and found it. Can’t make this stuff up.”

Ka-boom

One of New York EA Phyllis Jo Kubey’s clients never got a 1099 from a publishing company billed $900. “My contact there said that there was a record of my having been paid that amount but it wasn’t reported to the IRS, so therefore I didn’t need to report it either,” the client wrote. “Hearing things like this,” Kubey wrote back, “makes my head explode. It is your responsibility to report all of your income, regardless of whether the payer issues you a tax form. [The company] should not be dispensing poor tax advice to you.”