r/taxpros

I come from a background of big firms. I spent almost a decade at EY then was a non equity partner for a couple years at a $200M firm before now being a partner at a 30 person firm.

The other partners are all young like me (less than 40), but either grew up at this firm, came from another small firm, or only spent 1-2 years at a larger firm.

I feel like I’m hitting a cultural difference.

I learned from day 1 when proposing for a new client to map it out. I had excels that I would enter the time I thought to do everything including silly things like how much time going back and forth in year 1 trying to understand the business/return with the client. Then it would calculate the fee based on various levels hourly rates. I would then present a range to the client in the engagement letter. For example say I came up with $10k. My engagement letter would say I estimate to do these services to cost $9,000 -$11,000.

Once the work was done if the WIP was $9,000 I still would bill $10k. If it was $10,000 to $11,000 I would bill the actual. This matched expectations.

My fellow partners have a much different approach. First they pull a fee right out of their ass on the spot. No thought behind it. Next let’s say they quote $10k (never a range either). If the WIP is $9k they bill $9k because “it’s wrong to charge more than the work took”. If it’s $11k sometimes still $10k because “that’s what they agreed to”.

This blows my mind. We leave so much money on the table doing this. It’s not even a one year problem. If you bill them $9k and next year things go sideways and WIP is $10k now, suddenly you have to explain a 10% fee increase. Where in my example I would bill $10,200 and they would be like dang, fees only went up 2% for inflation? Nice!

Obviously this scales worse on bigger numbers. I’ve seen 10k+ left on the table per engagement. Then factor that in times hundreds of clients.

Whenever I bring this up, I’m looked at like I’m a scumbag. That I’m a greedy man that is literally robbing these little clients and they aren’t the big companies or HNW individuals I’m use to. I wish I was lying, that’s the looks and attitude I get.

Now I’ve begun to question myself and what I’ve done for 15 years. Am I horrible person? These people agreed to a fee range and I’m in that range. If I make 150% realization, that’s a win. And it helps me cover the clients where I can only get 70% realization. I’ve had clients where I think the WIP will be $20k or whatever but they refuse to extend so I quote them $25k because I know I don’t have time during busy season so I hope they find someone else. If they don’t, it’s the price for making me work until 10pm on a Friday in March. When the other partners find out I do this, it’s like I told them I’m shaking down an old lady in a nursing home. What do you mean you’re charging them $25k for $20k of work!

I have very recently left my national firm to go out on my own. Incredibly freeing and I’m excited for what‘s next!

At my previous large national firm, I mostly worked with our large corporate clients and very HNW individuals that aren’t really a fit for what I want to focus on going forward. However, I have about $100k worth of clients that are smaller businesses and more Average Joes that have indicated they want to follow me. I obviously have non-competes and completely understand that I’ll need to purchase the relationship from my former firm. My separation was very amicable and I plan to keep it that way.

What is everyone seeing out there as a reasonable multiple for purchasing clients? I’ve heard my Firm is generally asking 2X annual revenue, which seems a little steep but is in line with my 2 year non-compete. These are clients that my Firm wouldn’t even notice are gone, so I’m hoping to counter with something less.

Any thoughts out there as to what the going rate is?

I have a client who did their own tax return in 2023 and did not include 30k of income. IRS found out and is proposing deficiency tax of $10k and penalty of $2500.

I amended their return and the amended return also changed filing status so they have a refund instead of owing on the amended return even when including the income they failed to report.

I submitted the amended return in April this year. The IRS has their return but has not processed it.

We responses to the letter saying we disagree and included a copy of amended return.

Should we still file petition for tax court since IRS has not processed the amended return?

Should I call the IRS?

What steps should I take to help my client with this.

I do a handful of not for profit tax returns (like 5). We are in a very rural area so there isn’t very many professionals and these not for profits are very minor.

Is it unethical to provide bookkeeping/accounting services or tax services for an entity while also being a board member?

Im looking at buying a tax practice and I found a viable option grossing around 475K but its a bit of a 1040 tax mill. Are there any issues with doing this? I am buying one cause I don't have the time or savings to grow my own organically.

I've seen that some people may be against this idea but I don't know what the issue would be if the practice has decent revenue, low overhead, and good net income.

Im just interested in seeing what peoples thoughts on here are so I can be prepared.

Thank you to everyone that replied! I wanted to provide a final update: I was able to submit a new TIA request using the client's old address (thank you u/theflow165**) and I was able to get through to the IRS this AM. The woman was the nicest person I have ever spoken with there. She initiated a payment plan, and if/when her manager approves it then my client will start making payments next month. Thank you all again for the wisdom, this sub is so great!**

--Original Post Below--

I am pulling out my hair with the inability to reach the IRS so I am coming to the collective brain trust today in the hopes that someone here that knows more than me (which wouldn't be hard!) can help me fix a problem. Apologies for the length, but I want to give all pertinent details.

The Situation:

I started working with a client for TY24 for filing his 1040 as a married small business owner. He and I got along great right from the start, and he has now become my top client (based on annual fees), and I happen to like him as a friend too.

He has not paid Federal taxes consistently since 2020 when he started his business. We're in state without income taxes so at least no state obligations.

• In 2020 he paid $0 of his tax liability, currently sitting at ~$14k
• In 2021 he paid $0 of his tax liability
• In 2022 he paid a few estimated payments, but still has a balance leftover
• In 2023 he paid $0 of his tax liability
• In 2024 he actually paid 100% of his tax liability because he had to as a condition of a bank giving him a mortgage when he upgraded his personal home (I know, don't get me started)
• In 2025 he paid $0 of his tax liability

He "only" owed ~$15-20k each year, and he mostly filed on time, but with interest and penalties he's close to $100,000k owed to the IRS right now (just under, but within dollars as of last calculation).

Due to the efficiency of our IRS hard at work, the IRS has sent him letters for all the years but at the moment they're only threatening to tax lien him for 2020 via CP504 notice. No major threats yet for 2021-2025. And due to the extreme competency of our current administration, both he and I have been unable to speak with anyone at the IRS for the past several months to begin a payment plan because we keep getting the automated message saying they're too busy.

The Big Problem:

Other than the obvious above, he has been trying to speak to the IRS to create a payment plan for several months, well before the CP504 showed up. He visited the local office three times, all times he was turned away and told he needed to call. Last week I began being more proactive (up until now I felt this was his problem to deal with as our engagement doesn't explicitly cover this) because I like him and I want to help.

• I submitted an 8821/TIA request via my IRS Tax Pro portal and he checks daily to see if that request shows up and it does not.
• I have called the Tax Practitioner Hotline every day last week and only one allowed for me to get a call back, the other days I get the message saying they're too busy and to try back another day
• On the one call back I got, I had the woman on the phone for 1-2 minutes while I repeatedly gave her the CAF number that she said wasn't right, then she said she was going to look into it further, and then she disconnected from the call

So at this point, what else can I do??

When he logs into his individual IRS account he does not have any option to initiate a payment plan online. I am not a highly experienced tax pro, but:

• Several months ago I recall that he and I filled out the IRS papers to request a payment plan, we mailed it via USPS certified mail, and never heard back. I do not remember form names.
• He currently has ~$3k to pay towards 2020, but not the ~$14k that would be required to make this problem go away.

Many thanks and a ton of appreciation to anyone that can help with this situation. AI did not write this, I did, so any mistakes belong to me :)

***UPDATE ABOVE****

What is the best AI tax prep and review software right now. Is it Juno? Filed.AI?

Claude can do a decent job reviewing the returns right now. It will sometimes catch minor mistakes. But I am curious if there is anything else out there that works well?

Claude is probably the cheapest option for review right now.

Someone just received a notice for late filing of form 5500 with a ridiculously large penalty. The 5500 was filed, but late, I think by a year. So it’s probably too late for the irs program that allows taxpayers to come clean. Before I contact the IRS, I just thought I would check to see if anyone has suggestions or experience with requesting a waiver or significant reduction of this penalty. Not sure if it makes sense just doing a letter requesting it, or if I call. And if I call, just use the tax practitioner number?

I don’t provide this service for clients so not used to dealing with this. I basically stick to a 1040s.

I am curious if anyone uses MCPs, Codex, API, and how. I am not new to traditional AI/LLM. I've been using it for the last several years, and I'm not a developer and don't have a budget for hiring one. I was experimenting with coding myself. I ran out of codex credits quickly. I was trying to improve my website. I also tried to connect some MCPs for bizoraAI to OpenAI and some other social media tools that allow it so I can cross-post and generate content for my social media. Surprisingly, it worked.

I wish I had a second education in IT or tech. It's quite interesting, but I definitely like it and don't have time to pursue it, with being an accountant my main focus. just curious how other tax pros keep up with all these tech changes?

Client is asking if I will use their account and make the quarterly estimated payments. Seems like it will be more of a pain than its worth. Do you offer this as a service? Should I tell them its $300 a quarter for me to do this?

They get tax planning advice for free from the wealth manager so I can't really charge for tax planning as they won't want to pay for that. Thought about wrapping estimated payment services into a tax planning fee but won't be able to for this client.

Looking for an offshore bookkeeper to help with cleanups and monthly accounting. LEt me know if you would recommend anyone or any firm specifically. Thanks!

I have some clients who will not pay after we completed work, despite signing an engagement letter. They will not be returning so i dont care about burning the bridge. What are some good debt colelctors you all have used? They all seem sketchy online so am looking for a recomendation from people who have used them.

TLDR: I work for a firm that is stuck in the 90s and hates technology. The managing partner has mentioned that I am their exit plan but I don't know if I should stick around and actually try to modernize this dinosaur or just leave to a more modern firm or start my own. It feels like I would want to change too many things and it's like trying to shove a square peg into a round hole, but on the other hand if I could pull it off it would be lucrative because it is a pretty profitable firm.

Hello everyone,

I would like some career opinions from fellow tax professionals and firm owners.

My Background:

I am a CPA who has about 10 years of experience. About 9 of that has been in public accounting doing both tax and audit, and I did about a year in industry/government.

Firm Background:

I currently work for a small firm of about 10 people and am one of the 5 CPAs. I have been here almost 4 years. The firm has 2 parters, and both of them have said they want to retire/reduce involvement in the next 5 years. Each partner had their own firm and then merged about 10 years ago, and they run things very differently from each other. Each partner has a manager who works solely for them, and I am the only CPA that works for both partners. So, any changes made to the firm feel like they have to be made to two different sets of people.

My main gripe with the firm is just how old school it is. They still do everything on paper, yes, actual dead trees. If a client sends information electronically, they will print it, work on it manually, and then scan it in to the server once the project is complete. I have lost count the number of times I have seen calc tapes taped to excel sheets with handwriting all over it. When you have the workpaper files in your office, they literally pay an admin person to walk around the office with printed client emails and put them in the client's files so they have the hardcopy emails in there. I hate the paper so much that honestly, it is affecting my job performance, I fear that I am just so burned out on it that I just can't do it anymore. The hardest part of the job for me is literally just flipping through hundreds of pieces of paper to get a tax return done. When I work on a tax return or am reviewing a return, I am more focused on how much I hate the paper than I am on the actual accounting.

They don't understand why they can't hire anyone, and it is so obvious. They don't offer remote work, everything is on paper, and they don't offer a lot of PTO. They want 1,800 billable hours per year, and tax season hours are 55-65 hours a week in office, including Saturdays.

I am the youngest CPA by a mile, I am in my mid thirties, and the other CPAs are mid fifties- mid seventies.

The things I like:

1. The pay is pretty good, I make $130k with a 4% 401k contribution.

2. The partners are genuinely nice people.

3. They have complex work that has really helped develop my tax skills. They have really good fees they charge to clients and aren't pushovers. If clients are too demanding or are being rude, they fire them.

4. I convinced them to buy me a laptop so I can work from home sometimes. It is definitely frowned upon to work from home, and I feel like I need an excuse to actually do it. Also, obviously, since everything is on paper, I'm limited to what I can do from home and am constantly lugging boxes of paper around.

The Dilemma:

I can't decide if I should stay and build my own book of business here/take over some of their clients and then take over the firm whenever they decide to retire. The difficult thing with getting new clients is that we are so understaffed, and we are already at capacity. When the only other young CPA left about 2 years ago, they haven't been able to replace them.

On the other hand, I kind of just want to leave and do my own thing or join a more modern firm that would help me build a book of business. I just haven't really tried to go out and get clients, so I don't know how difficult it is, I'm not a natural social butterfly and so I haven't really networked a lot.

I have talked to them about adopting technology and getting more modern, and the partners seem onboard, but nothing has changed. I just don't honestly see them doing it. It is so hard to take people who have done work on paper for 30+ years and get them to do it electronically. Apparently, they tried to modernize a while back before I was here, and it was too much for them, so they abandoned the idea. Also, since AI is gaining popularity, it is kind of a double whammy because I would need to teach them how to work electronically on top of the new AI stuff.

I'm worried that if I continue to stay here and can't change anything that I will lose my technology skills and become a dinosaur also.

The firm suffers from the Pareto principle. One of the managers honestly completes like 60-70% of the work by themselves. They are a workaholic and do about 2,500 billable hours a year, and they love their paper. Honestly, I would have no idea how to get them to not print stuff. They have told me multiple times that they don't like to look at information on the screen.

Questions:

1. Has anyone been in a similar situation? What did you do, and how did you handle it?

2. Is it harder to get people who hate technology to adapt or start from scratch and get clients?

3. What would you do in my situation?

Hey everyone - I am helping my dad modernize his firm. Paper heavy with a lot of manual steps for intake before a return even gets prepped. He’s been super on board tho

Was wondering if you guys had any tips with using taxDome in a high volume practice ( ~1400 returns a year )

Hi Everyone! My small firm (20 employees, 10 on my team) is in the process of migrating over to Canopy from Practice CS (Thompson Reuters).

Any useful tips for people who have been using Canopy? Like good "tags", "filters", or anything? Our implementation guide knows Canopy, but I don't feel like he has any idea of how it can make our practice more efficient. We have a massive client list (about 2,700 for the 10 of us) and so organizing all of this and filtering will be huge for us.

Even Task template ideas would be helpful too. I'm 33 on track to partner in a few years, so this set up we're doing now will likely dictate how efficient I am and my team is for a long while. Any help is very appreciated!!

Hi all! For those who work in small firms, what software/resources do you utilize to research filing requirements for income tax, income sourcing, payroll, sales tax for multiple states? Recently I’ve been doing a lot of state by state research into each of those requirements, and it is very time consuming. Would be great to have a single resource to reference for filing requirements by state, by tax type. I’ve seen people mention CCH State Smart Charts on this sub, so I’ll be looking into that at bare minimum. Appreciate any recommendations!

Hypothetical for my fellow pros

Would you work for a company that has an offshore team that prepares the returns but they intentionally avoid disclosing this to clients? The CEO is the one that signs the returns. Your job is more review and client interaction.

Follow up, would you report this?

(Yes, I know that signed disclosure is mandatory. This is the second company I’ve been involved with that doesn’t disclose.)

Currently been building my practice with Canopy. It is ok. But overall I feel like I should have went with TaxDome.

TaxDome seems like it has more features and things are built out better. For example I was going to use Canopy for client payments and have run into issues. Also Canopy charges for KBA signatures while tax dome includes them for free.

Anyone here use both and have a preference for one or the other? I hate to transition my clients to a new platform but my firm is young enough that I can do it.

Currently use MS Office and zoom. I feel like good workspace could replace both of these.

Looking for advice on tax planning, IRS correspondence and tax return review. Saw demos for both BlueJ and CoCouncil. both seem pretty similar. Is there a glaring difference between the two that I did not see?