Posts Tagged ‘2023.Tax.Season’

2022 Tax Season: The Tax Season From Hell (Part 4)

Friday, November 4th, 2022

To recap, in Part 1 of this series I dealt with IRS failures in the 2022 Tax Season; in Part 2, I covered what the IRS should do to fix the mess.  In Part 3, I wrote about what our firm got wrong.  It’s now time to look at the opportunities (or change-points) to resolve our issues.

1. We’re upgrading our hardware and software.  Our computer server is being replaced in a little over one week (which should allow us to access files faster).  We’re switching to a unified back-end software before year-end; this should eliminate (I hope) or greatly reduce our internal systemic issues and increase our work-flow efficiency and speed.

2. We’re moving to a new office in December.  We’re moving across the courtyard to a larger office that’s far better suited for our needs.  We’ll have room for expansion.  While I’ll miss having the only 17-sided office in the country (yes, it’s a heptadecagon!), the new office will work better for our staff.

3. We’re moving up our submission deadlines.  We need to be able to better deal with the workload, and we simply couldn’t get everything done correctly and provide the proper level of service with our old deadlines.  This does mean many of our clients may need to file extensions; however, while inflation is adding costs for all of us, the 24-hour day remains just 24 hours long.  (The details will be in the Engagement Letters we send to our clients in December.)

4. We’re changing our work hours for the health and efficiency of our staff.  We’re decreasing the hours we’re working during Tax Season.  Everyone needs time to recharge, and working seven days a week isn’t healthy.  We will be starting our increased Tax Season hours earlier, but our staff deserves time off every week–and they will be getting it this year.

5. We’re raising our rates for the 2023 Tax Season.  There are two major components of this.  First, as I’ve detailed in the past, inflation is impacting every input.  From the paper we use to the software we rely on, everything has gone up between 10% to 488% from last year.  Like every business, we must pass that on to our clients.  Second, we believe we’ve been charging too little and we need to adjust our rates (while providing a far better level of service than we did in the 2022 Tax Season).  (The details will be sent when we distribute our Engagement Letters.)

6. We’re not planning on net growth of clients for the 2023 Tax Season.  When Price goes up, Demand goes down; that’s one of the outputs of the Law of Supply and Demand.  We do expect to lose some clients because of our price increase, and we accept that.  Additionally, we’re going to cap the number of clients based on the number of returns we can realistically complete with the level of service we want to provide.  It’s quite likely that we will not be accepting new clients sometime early in 2023, so if you’re interested in using us, now is the time to let us know.

7. We’re attempting to hire another tax professional (or trainee).  Even though the economy is in a recession, the job market remains extremely tough.  We’d like to hire another tax professional, and we’re looking to do so.  Our trainee from 2022 will be on board as a tax professional for the 2023 Tax Season, so that should help.  Still, demand remains strong (and likely will continue to be strong as long as the Tax Code remains as convoluted as it is today).

Will these fix our issues from the 2022 Tax Season?  At minimum, they should greatly reduce the issues we faced.  However, no one can predict the future.  I can promise that we’re not going to have a repeat of the issues we had during 2022, and we are building more resiliency into our systems.

Is Anyone Happy In Tax Professional Land?

Wednesday, October 19th, 2022

Except for our four international clients on second extension and our ten clients impacted by Hurricane Ian, the 2020-2022 Tax Season is over.  I expect that within one month, we will be off filing returns until February 2023 (well, there is our one September fiscal-year-end corporate client….)  We had quite a few issues this year, and I’ll expound on them at length in the next week or two.  For now, let me ask a question:

Among tax professionals, is anyone happy?

I saw lots of tax professionals leaving the profession over the past two to three years, and it didn’t make sense to me.  This is a good profession where we help our clients.  I enjoy the work (yes, someone has to).  But this past Tax Season was the first year I felt, at times, that I didn’t like what I was doing; I now understand why tax professionals are retiring.

This has major impacts to our clients.  The Law of Supply and Demand holds throughout the world (no matter what politicians say).  If Supply decreases, Price increases.  Even if inflation were 0% (and it’s not), prices would be increasing significantly.  Add in the huge inflation we’re seeing (example: paper prices at Costco have increased from $28.99/case to $35.99 $36.99/case since November 2021), and most tax professionals will be increasing prices dramatically for the 2023 Tax Season.

Did I mention Demand?  That’s increasing, too.  During the month of October (and today is October 19th, so there’s still another nine business days) we’ve received twenty inquiries for next year!  So that, too, will cause price increases.  Additionally, if you are seeking a tax professional to assist you with your 2022 tax returns now is the time to find him or her because January will likely be too late!

I’m going to have a lot more to say about this as I review our failings (and, unfortunately, there were plenty) and successes during the 2022 Tax Season.  I’ve written two parts of the series (Part 1 and Part 2 were posted earlier this year); Part 3 should be up by the end of next week with Part 4 following soon thereafter.

Let me go back to the question I asked and ask it of myself: Was I happy doing what I do this year?  Far less so than in the past.  This means changes are coming–perhaps dramatic changes.  I am going to be happy doing what I do or I won’t do it anymore: life is too short to do otherwise.

UPDATE: I just returned from Costco to buy paper (and a few other items), and the price has increased $1/case (to $36.99 from $35.99) from September.