Not Your Mama’s TaxPro – The Evolution Of Professional Tax Return Preparation



Even during the best of times, the work environment for tax practitioners during tax season can be described as toxic. Return volume is high, time is short, and clients are often—problematic. Then along came Covid-19. In 2020 even though deadlines were extended to help taxpayers and tax practitioners cope with the effects of the lockdowns many tax practitioners struggled to adapt to a business model without face-to-face interaction with clients. Many were completely unprepared. Others, however, were ready. Enrolled Agent and self-described “gadget girl” Nayo Carter-Gray had been moving towards a fully virtual practice for years when the pandemic hit. During that time she realized that the process for changing from an in-person to a virtual office wasn’t taught anywhere. She had learned piecemeal. So in the summer of 2020 she launched the Taking Your Firm Virtual Summit as a comprehensive vehicle for practitioners wishing to move their practices into the 21st century. This year’s summit runs from August 3-5 and features a broad complement of speakers who will help tax practitioners continue to transform their practices in preparation for what promises to be at least a few more chaotic tax filing seasons.

Practitioners like Nayo and her speakers are on the leading edge of the tax and accounting future state. They are transforming a staid industry into something much more valuable to its clients while also working to eliminate some of the industry’s more toxic traits. But what does that have to do with me, the taxpayer, you may be asking? Quite a bit actually.

The trend toward virtual offices is accelerating a more general trend in the tax and accounting industry toward automating the most routine client interactions and tasks. Newer practitioners see automation as a way to grow their firms while providing an extremely high level of service to their clients. More established practitioners have begun using automation to reallocate their resources from office administrative tasks to more advanced tax planning and issue resolution that can only be done by a human. So what types of changes can taxpayers expect moving forward? Keep reading to find out.

First, finding a retail tax practice with regular hours where you can walk in without an appointment, drop off your paperwork, or even have your tax return prepared while you wait may become more difficult unless you choose one of the large chains. Many smaller practices and solo practitioners have made the post-Covid realization that working from home works for them. Eliminating rent from office overhead means either higher profits or the same profits but a much lower workload. Even practitioners who maintain an office outside of their home may no longer offer walk-in or drop off service, especially solo practitioners.

Some practitioners will no longer accept paper documents. Clients are expected to complete annual engagement paperwork and organizers online and then use a secure portal to upload their tax documents. For security reasons even fully virtual firms will not accept documents attached to e-mail or (crikey!) via text message. Those firms who do accept paper documents usually will also accept uploaded documents or maintain a largely paperless office where client documents are scanned and returned to the client.

Clients should also expect to self-schedule document pick ups and drop offs and phone calls. Solo practitioners especially are learning to use self-scheduling applications and time management tools to block specific times for specific tasks. For example, many practitioners block off their most productive time for working on tax returns and less productive time for returning calls and answering e-mails. Tax returns will be delivered electronically, picked up by appointment, or delivered by mail or courier and, once the documents are in hand, the client will use an app to schedule a review appointment if desired. Some practitioners may still offer in-office appointments, but clients can also expect to be encouraged to choose phone or video chat appointments instead.

Amanda McGowan, owner of Elevating Profits in metropolitan Denver, is both an Enrolled Agent and a business coach. She teaches tax practitioners how to achieve a “no call office.” Amanda is a big proponent of using time blocking to set professional boundaries especially for seemingly urgent but rarely truly important items (calls, e-mails, drop in visits) that often interrupt more productive workflow and deep work. She encourages using a website for basic tasks such as scheduling and FAQs to provide answers to common questions. The process does meet with client pushback especially for those expecting an immediate response about making an appointment, office hours or prices, “where’s my stuff” type updates, or to see if the firm is accepting new clients. Nevertheless, the no call office can realize huge benefits for tax practitioners who implement it and, eventually, clients who truly value the practitioner’s time get used to the boundaries and those who don’t find another practitioner.

Annual client interviews and initial client screening are moving online as well. Nayo uses her online client onboarding interview as a screening tool for potential clients. Potential clients who do not take the time to follow her well thought out instructions and process are deemed not a good fit for her practice and left to keep shopping for another provider. Even existing clients who do not make use of written instructions or video tutorials and who insist on calling or e-mailing their tax office for technical support could find themselves looking for a new tax professional. In general, beleaguered taxpros are now much more willing to fire clients who are deemed high maintenance and/or low margin. In other words, too much work for not enough profit.

Tax practices who depend on high volume may be willing to prepare returns for almost any client but this high-volume business model is disappearing except for certain niche areas. Taxpayers with simple to medium complexity returns often opt for do-it-yourself software rather than paying a preparer. Firms that specialize in medium to high complexity returns often cannot accommodate high client volume during tax season without adding and training additional staff, which often increases overhead in amounts out of proportion to the profit on the additional returns. Rather than add tax season volume, some tax practices are simply adding other services (for example proactive tax planning and business advisory services) that generate revenue throughout the year and using automated proposal and marketing software to attract this new type of business.

In general, cutting edge tax and accounting firms are using automation to streamline office processes, reduce overhead, and optimize the use of human talent. By doing so they can both facilitate growth and provide themselves with some much needed breathing room during and outside of tax season. Jamie O’Kane, CPA-owner of Abundant Beans Tax & Accounting in Littleton, Colorado says “Accountants tend to be ‘helper’ types that will bend over backwards for their clients in a way that doesn’t serve either the client or the professional.” Having a virtual practice can compound the problem because of the ability for the practitioner to work anywhere at any time. On the client side the appearance of 24/7 access can create unrealistic expectations about practitioner availability and work turnaround times. On the practitioner side it can erode work-life boundaries to the point where the taxpro never has the downtime necessary to recharge. In addition to burnout, being “constantly on” can have physical consequences: debilitating headaches, hives, even heart attacks. At this year’s summit Jamie is teaching virtual taxpros how to streamline their communications to ensure nothing slips through the cracks without spending too much time managing paper and processes. She’s also providing taxpros with the tools necessary to regularly, and sometimes automatically, communicate with clients to reassure them that their documents and questions will be properly handled—but in a way that maintains efficiency for the taxpro.

Tyrone Gregory, “The Self Employed Tax Guy” from Cerritos, California, is teaching a class called “The One Man Band” at this year’s summit. He feels that many solo practices fail because of lack of efficiency on both the practitioner and client side. According to Tyrone, the most common inefficiencies in solo practices stem from issues related to the prompt collection of complete information. “There is always something left out and there is always an issue when it comes to trying to get the client in the seat.” In other words, practitioners spend too much time trying to force clients to promptly submit necessary information. Tyrone’s goal is “to show both the professional and the clients how all of this could be resolved if they just embrace the technology that we have in front of us.”

Clients who are looking for highly personalized service and who expect a high level of person-to-person interaction throughout the entire return preparation process should be prepared to find a tax professional who provides “concierge level” service and should expect to pay for it. Good tax professionals are just that—professionals. They are passionate about tax and about helping businesses succeed (both their own businesses and their clients’). The goal of a good tax professional is to ensure that you pay the correct amount of tax and that you get every possible tax benefit to which you are legally entitled. Moving forward tax professionals will choose to spend their time doing just that and automating the more mundane aspects of running a tax practice: appointment scheduling, answering routine calls, data collection, etc. No one likes change, but clients and practitioners who take the time to adapt and to learn the new tools are likely to realize that the added convenience of well-placed automation makes up for the time spent on the learning curve.