What Happens to Clients Who “Want a Second Opinion”?

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Something I always wonder: when a client claims to be unhappy with how their tax return turned out, and so they go somewhere else, what ends up happening with that client?

How do they react when the other preparer inevitably tells them the same thing I told them?

This past season, I had something happen that had never happened before: a long-time client left me when I gave them bad news. In the past, the people who have done this have always been new clients that I had no prior relationship with.

But this one was a long-time client.

This client typically got refunds, but this year the wife had changed jobs and cashed out nearly $60,000 from her 401(k) when she quit her old job. They’re under age 59 1/2 and no other exceptions applied, so the 10% early withdrawal penalty applied. They also got kicked into a higher tax bracket, and their income was too high for the child tax credit. So … they owed about $6,500 in taxes instead of getting their usual $2,500 refund.

They had been with me since the days when my business was a side business and I had a “rolling office” making housecalls to pick up people’s files.

I remember driving to their house, down a dead-end gravel road in the countryside (in wintertime!) and having to sit in my car while they called off their snarling hunting dogs so it would be safe for me to get out of the car.

I remember, later on when I established my office in my house, having them come to sign their papers and they brought their child, and he went and played with my kids while we talked about taxes.

I’m not naive and I know that I wasn’t best buds with these people. We weren’t BFFs or anything like that.

But I also didn’t expect them to kick me to the curb like a bag of garbage.

These people had:

  1. The 1099 for the wife’s $60,000 401(k) withdrawal
  2. Their W-2s showing nearly $100,000 of income between the husband and wife
  3. A mortgage
  4. Daycare expenses for their kid

And that was it. There was no magic I could work on this return, nor would they possibly get a different result anywhere else because, on returns such as this, the numbers come to what they come to. I explained all of this in an email.

I did say that they might benefit a little bit from filing separately, and that I’d run the numbers on that. And I also ran numbers on how tax reform would affect them, and told them that 2018 would be much better with the doubled child tax credit and friendlier phaseout limits on that credit, and without the $60,000 401(k) withdrawal.

I got an email back from the wife — followed immediately by a text from her — informing me that they wanted “someone else to do our taxes this year.” She also informed me she would be stopping by in “10 minutes” to pick up their stuff.

And so she pulled in the driveway ten minutes later. I walked out the door to meet her, and I handed her the papers. She said thank you, I said you’re welcome, and away she went.

A long-time client had tossed away their relationship with me because I delivered bad news to them.

Being a sensitive guy, I really want to know what happened to them.

How did they react when whoever they went to next told them the same thing I told them?

Did they tell that person to go ahead and file the return? Or did they take their stuff back from that person and seek out a third opinion … or did they end up just preparing it themselves?

The funny thing in these situations is, it’s NEVER people with complicated situations who seek second opinions.

One time it was a person filing a 1040A for their one W-2 and their student loan interest. They thought their refund should be higher and so were going to “get a second opinion because clearly this is not right.”

What was their reaction when the second opinion got the same result as I got?

I’ve said before that this field is making me horribly cynical. It’s things like this — along with the whole “accountants should be proactive but clients don’t need to be proactive themselves or take any ownership for making decisions” nonsense — that are contributing to my cynicism.

As I wrote in this post about how CLIENTS have a responsibility for being “proactive” too:

In these types of discussions, we never hear the accountant’s side of the story.

Like, I think about all the times I’ve asked business clients to give me their financial data before the year ends, so I can run projections and stay on top of how things are looking — and the client ignores me until tax time.

And then, when it’s too late for me to do anything about their tax liability, it’s somehow my fault for not being more “proactive” and not doing enough to help them….

More to come in future posts.