Random Lessons Learned While Preparing Taxes This Season

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As some of you may know, I worked part-time this season at a national tax preparation chain.  Initially, I was looking for something to do part-time as I wound down my real estate business and prepared for our impending move to Australia.  I obviously had a passion for personal finance, but before this season I had never considered doing my own taxes, let alone preparing them for others.  All things considered, I’m extremely happy I gave it a shot.

Over the last four months, I came away with one dominant conclusion…

The general public is absolutely horrible with their money!

Our typical client was a low-to-middle class, blue-collared, “average joe” type of person.  Usually with a kid or two and almost without exception in deep financial trouble.  Over the course of several months, I worked with hundreds of unique people with various levels of income and work ethics.  Yet, I can count on one hand those whom seemed to have any grip at all on their financial lives.  I understand that the wide majority of people who have control over their finances are able to fill their tax needs in a much more efficient and cost-effective manner than what the company I worked for was offering.  But three or four out of a couple hundred?  Really?  It was truly a wake up call.

Other characteristics of our “typical” client:

  • The desire to do and/or pay just about anything to get their “rapid” refund in 24-48 hours. The first two months of the tax season, 8 out of every 10 customers that walked through the door made a B-line to the nearest employee and asked one simple question, “How quickly can I get my refund?”  Seriously, this was the absolute first thing that left their mouths upon walking in.  I could have said, “24 hours, but it’ll cost you a grand…” and converted at least half on the spot.  Not until much later in the season did the question slowly change into, “How much do you charge?,” which seems like a much more reasonable starting point.
  • The willingness to openly discuss any and all of their personal issues with a stranger. Anyone who works in customer service knows that this is a huge part of the process.  People, in general, love to discuss their own situation and struggles, especially when you are digging through details of their financial life.  Preparing even the easiest returns takes at least 20-30 minutes.  You’d be surprised how many intimate details you can learn about someone when their mouth is moving constantly for a long period of time.  I’ve heard more than my fair share of divorces, bankruptcies, foreclosures, repos, layoffs, and random political theories.  I’m good for at least the remainder of this year…
  • The honest belief that they are owed something. A large majority of those taxpayers whom had no taxable income earnestly believed the government owed them a large refund.  Don’t get me wrong, there were a lot of hard-working, blue-collar people who would’ve loved nothing more than to pay their fair share of tax and to then have the government leave them alone for another 12 months.  I have a lot of sympathy for those who are struggling and are able to be helped through refundable tax credits.  However, once genuine gratitude morphs into self-righteous entitlement, my sympathy quickly fades.

O.k., I realize I’m coming off as a little bitter…  this isn’t my intent.  In reality, I wish I could reach out to these clients.  I wish I could introduce them to some of the concepts I try to study on a regular basis.  If anything, this has reinforced my belief in blogs, books, and other personal finance media.  Now, more than ever, we need a strong combination of inspiration and information.

Now For Some Funny, Sad, and Bizarre Tax Stories!

First, let me tell you about the single guy who had $9,000 in gross income spread out over 6 different W-2’s. Nothing was inherently wrong with this situation (other than the young gentleman’s ability to stay with one job), until he began talking about how he was going to spend his refund.  I was entering the 4th W-2 into the computer when he began discussing the different type of cars he was considering purchasing with his tax refund.  I wasn’t sure how to approach the issue…  I mean, it’s fairly easy for someone familiar with taxes to see that he wouldn’t have any taxable income and therefore would only be getting refunded the amount that was withheld from his W-2’s.  He wasn’t really talking about any $240 dollar cars to say the least.  The absolute worst part of my job was resetting grossly inaccurate refund expectations.  He took it reasonably well compared to some of the others…

Next, let me share the story of the part-time newspaper delivery guy. This client actually had a fairly stable and decent income from his primary employer.  In addition, he worked every other Sunday delivering newspapers for a couple hours.  He was 1099’d for the amount he was paid, which came out to roughly $3500 in side income.  After filling in the initial details on the Schedule C, we came upon the expenses section.  He stated that he had to drive his own vehicle and was told he could claim the miles…  fair enough.  He reached into his pocket an pulled out a piece of paper with one number on it…


[awkward silence]

“What’s that?…”

“My business miles…  I was told I needed written proof”

[blank stare]

Breaking down the remaining conversation line by line would be a full post of it’s own.  Let’s just say we got to the point where I told the gentleman that we wouldn’t be able to finish his return if he insisted on claiming 114,000 business miles.  It’s not the fact that he didn’t have written proof (that’s between him and Uncle Sammy), but rather that both myself and the company had to use reasonable judgment when filing information we believed may be fraudulent.  In the end, he elected not to claim any business miles at all (shocker).  He happily received his refund 24 hours later.

Then there was the Indian couple who spoke nearly no English. To make matters worse, they spent the first half of the year in a different state where they had worked for a small businesses (also Indian who spoke very little English), who had elected not to send them W-2’s.  The couple, god bless them, had kept what I can only assume was every receipt from every purchase they made in 2008.  In all, I would estimate we spent 10-12 man hours spread out over 3 employees to finally get them filed.  Upon signing the paperwork, they informed the owner himself that they did not have any money to pay for our services until next month (a.k.a. past deadline).  The owner ended up taking a post-dated check and getting them filed on time, which basically meant he was writing it off as a learning experience!

Last, but certainly not least, was the gentlemen who tried to pick a fight with a room full of tax preparers. The actual preparation went incredibly smooth.  He was set to get a decent refund and elected to get it within 24-48 hours.  There was only one problem.  Our friend owed the IRS several thousand dollars from the last few years (which we had no way of knowing up front).

The following events happened approximately 40 hours later after receiving a phone call from a manger telling him his rapid refund was denied to due an IRS ‘debt indicator’ alert.

The Incredible Hulk enters stage right.

Unsuspecting Tax Preparer:  “Hi, how can we help you today?”

The Incredible Hulk:  “Yeah, I was told I would getting my refund by today at the latest and I just got a call saying that you weren’t going to be giving it to me…  I’m not leaving this ****** place until I get my refund.”

Note:  I’ve watched this unfold in the first 20 seconds and at this point am wondering who in the world comes in the door and just throws down like that?  I mean honestly, I’m a fairly decent sized guy, but I’m pretty sure my 3 months of Brazilian Jui-Jitsu were no match for his sheer ‘roid rage.

Unsuspecting Tax Preparer:  “If you would please calm down…”  (obvious mistake)

The Incredible Hulk: “What are you gonna make me calm down?”

Oh, snap.  This was really happening…  My mind flashed back to the seventh grade when I had last encountered this exact issue.  I quickly scanned the immediate area for sharp objects in case he charged, but there were none.  Instead, I did the next most manly thing I could think of

Baker: “Sir, we’d love to help you, however, if we can’t all be reasonable… I’m calling the police.”

Yeah, I went there… Immediately afterward, I estimated my chances for survival at around 60%. Luckily, the odds were on my side and over the next 15 minutes several employees helped deflect the unjustified anger onto the only entity that always deserves it…  The IRS!

Anyone else have any awkward stories about tax season to share?  What about pointless rants?  I’m obviously in the mood for either… Share below!

12 thoughts on “Random Lessons Learned While Preparing Taxes This Season”

  1. And that is why I am glad I am not in the tax preparation business, that and I wouldn’t feel good about charging people for their “24hr” refund. Excellent use of self-righteous entitlement by the way.

    Kyle’s last blog post..Tax Day Tea Parties

  2. @ Kyle – Haha, thanks for your help with the writing block last night! Charging people for the advance was a very difficult part of the process for me. I did my best to outline all the charges and persuade people away from doing it. It helped that I was not in a system that rewarded selling this product as the additional fees were all charged by a separate bank. We simply charged a flat-rate for preparation, which helped ease my hesitations.

  3. @ Ron – Yeah, man. It was truly an experience. Like I said, I’m glad I did it and I learned a lot!

    @ Kosmo – Thanks for seeing I’m the good guy! Although I can’t tell him what he can or can’t claim, we have an obligation to reject filing any reports that we suspect could contain fraud!

  4. Your first year as a tax preparer!.
    Came back nex year it gets better every year. I am on my Six year. It’s not the money so much is just the experience and the stories about what people do. Just remember that you should be paying taxes on every dollar that you earn.

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  6. Great scenarios. And I know every one of them. Read somewhere that taxhiliration is the excitement of getting a tax refund until you realize it is your money to begin with. This is of course was before the huge refunds for EIC. I have been doing taxes for 4 years and I wonder what the term is for the excitement you feel for someone else getting an EIC refund until you realize it is your money they are getting.

  7. the people who came in early in the season likely came in because they needed money soon, otherwise they would procrastinate until later in the season; the people who procrastinated don’t need the money quickly, thus their questions focus more on cost

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