By Tim Frye
When it comes to learning a skill it is often most beneficial for the person to be shown exactly how to NOT perform the task. So when learning how to prepare taxes you may want to learn the best ways to fail as a tax preparer first. There are a multitude of ways to do a bad job when you are preparing a client’s taxes and the consequences of your failure could reverberate for you and your client in the years to come. You have your client’s life in your hands when you are tapping that keyboard. So let’s take a look at the best ways for a tax preparer to make NO money doing taxes.
Tax Preparers with Criminal Records
One of the main ways to make sure that you make NO money as a tax preparer is to run afoul of the law or simply have a criminal record when you are a beginning tax consultant. Nowadays every one has access to criminal records and background checks, all it takes is one google click for a prospective client to see your entire history. If you are a tax preparer with a rap sheet you are going to be searched most likely and are going to have a very limited amount of people who are willing to trust you with your precious financials. People are looking to deal with a squeaky clean accountant not one who they have to worry is possibly going to rip them off and disappear. Remember that when you are preparing taxes you have your nose in their most private and protected financial details, and this is all such personal information that it could really be used for fraudulent purposes. So stay out of trouble in general, but especially if your prepare taxes for a living and are planning on making some good money.
Tax Preparers Engaged in Fraudulent Actions
Another super way to make NO money doing taxes would be to engage in fraudulent activities such as falsifying dependents on a client’s return just to get the client the EIC, or Earned Income Credit. The IRS is now more than ever requiring tax preparers to be extremely diligent when it comes to vetting a person for the EIC. So if you are adding on kids to the tax return that are legally not eligible for the credit knowingly, you could be looking at some boiling hot water with the IRS. And with is probably the quickest way to make NO money doing taxes? Well, how about having your tax license revoked by the IRS for falsifying tax returns intentionally for your clients? That should do the trick. So be sure to stay clear of these activities such as inflating deductions, claiming ineligible school credits, and falsifying your clients records to the IRS. That is surely not something the FEDS are going to be taking too lightly.
Tax Preparers Who Overcharge
Then there is the tax preparer that charges $300 for a short form EZ. Another one of the quickest ways to lose a client after one try is to overcharge them them. You may be thinking that your start-up needs the money more than most so whey not squeeze ever last dime out of any client who comes to you. Most of the time, after you have completed the tax return, the client will pay. And they will disappear quicker than you can say “See you next year!” You may be able to post one or two good years of billing stats overcharging people for your services, but the jig will eventually be up and the majority of people will go and find someone who is not ripping them off and will do it for half the price with the same or better result.
Tax Preparer is Never Around in the Off-Season!
There has always been a rumor that most tax preparers are also part-time magicians because most of them seem to be able to make themselves disappear on April 16th, and then mysteriously reappear on January 15th in the same outfit they vanished in. And though it is true that most tax preparers are of that ilk, that prototype will help the more year round tax preparer pick up the slack and make good money. A lot of tax preparers will put their nose to the grindstone for four months, and then pull that famous disappearing act for the following eight months. If you go missing in the off season, then your client base is going to dry up quicker than Big Bear Lake. People want to be comfortable knowing that they can get a hold of you most of the time year-round in case they run into any unexpected tax issues, just need advice, or are God forbid getting audited. And you are not going to build a truly solid client base unless you keep your doors open year-round. After all, you can’t make money if your doors are closed and your desks are collecting dust can you?
Are you looking to become a tax preparer and get started on a new AMAZING career today? Then go to our courses page and get going right away!
