Why is it when people owe, they blame the tax preparer?

 

"I had to pay taxes this year when I should have gotten a refund. I need a new tax preparer!"

In a recent discussion on the online forum Reddit, tax pros and accountants answered the question, "Why is it when people owe, they blame the accountant?" The responses (many of which are not appropriate to include here) highlighted just how common this is and how frustrating it can be for a tax preparer.

Obviously, taxpayers are unhappy when they find out at tax time they owe taxes when they were hoping for a refund. Clients can be upset when they find they owe. Money is an emotional issue. 

 
And when you're sitting across the desk going over their return, they might think you're responsible and that you didn't "do a good job" for them. After all, you're the one who knows all about filing taxes. They trust you and expect you to represent their interests.

 They may also have a basic misunderstanding of how tax works. 

In some cases, clients even refuse to pay for their tax preparation when they are unhappy with the outcome. 

Let's take a closer look at some of the reasons clients blame their tax preparer when they owe, and how a tax pro can respond and help them avoid this situation in the future.

Lack of Tax Knowledge

One of the primary reasons clients blame their accountants is that they have misunderstandings about taxation, withholding, deductions, and credits. They may rely on inaccurate, out-of-date or unreliable tax advice. They’re shocked and disappointed when they find out from a tax professional the advice simply isn’t true or doesn’t apply to their situation.

"Dude, you didn't do my tax return right. I clearly should have gotten a refund! Did you not see my $500 on charitable donations?!" - Reddit comment

Social media is a major contributor to misunderstandings about tax law, especially when it comes to advice on how to get a large refund or avoid paying taxes. Clients may trust tax advice they see on Facebook, X, and other social media, and believe it applies to them. This has become such a big problem the IRS has an article on its web site called “Taking tax advice on social media can be bad news for taxpayers.”

There are many reasons you can share with your clients that social media might not be their best source for tax information. First, even if the individual offering the advice calls themself a tax expert, they may not actually be qualified professionals. Second, tax laws are complex and frequently change, so outdated or incorrect advice is common. Third, social media posts often lack the context of the individual taxpayer’s situation needed for accurate tax filing.

Ad posted on X.

 

Also, keep in mind that social media success is based on likes, shares and follows, which often drives questionable or even dishonest tactics that are likely to discourage objective, factual advice. We’ve all seen posts like “Five Ways to get the Refund You Deserve.” There’s a reason many of these posts are called “clickbait.” 

Misconceptions About Refunds

A common misconception among clients is that a large refund is a good thing. Who wouldn't want a few thousand dollars to show up in their account? Some taxpayers see a refund as a year-end bonus, or the proceeds from what they think of as an informal savings plan. They don't realize that a refund basically represents an interest-free loan they made to the government, and that they could have been putting that money to work for themselves instead.

Misunderstanding the Responsibilities of the Tax Preparer

Some taxpayers can quickly fill out their own, accurate 1040EZ, but filing an income tax return can be complicated, and the rules are always changing, so they often turn to a tax pro like you. They expect you not only to be the tax expert, but to be their advocate and to get them the best possible outcome – a large refund. They don't necessarily understand how the specifics of their tax situation might lead to a less-than-ideal outcome, or the tax pro's ethical and compliance obligations when preparing a return.

The Solution: Comments and Helpful Ideas From Tax Pros in the Field

Client Education

Education can go a long way toward setting realistic expectations with clients. By explaining the reasons behind the client’s tax situation, comparing year-to-year summaries, and updating withholding forms, tax pros can help clients understand their tax liability better. This education can reduce the likelihood of clients blaming the preparer and help create a more trusting and collaborative relationship.

Tax Planning

Another way to avoid surprises on April 15 is to work with clients throughout the year to make them aware of their current tax liability, and to plan for the tax implications of any changes in their situation. You can help them adjust if their employment situation changes, if they may need to report capital gains from a sale of property, and if there's a marriage, birth, or death in the family, all of which can affect their tax liability.

Upfront Payment Policies

To mitigate issues with clients refusing to pay after discovering they owe taxes, some tax firms require payment upfront. This approach ensures that the preparer or the firm is compensated for their work regardless of the client's tax situation.

Selective Clientele

Some tax preparers and accountants choose to work only with referred clients or those who fit their firm's desired profile. This selective approach helps avoid problematic clients who may be more likely to blame the accountant for their tax situation. By focusing on clients who are more informed and cooperative, accountants can create a more positive working environment.

What to Tell the Client

Here are a few things you can say to help a client deal with their disappointment:

• "I know it's frustrating to owe instead of getting money back. Want to sit down and go through the numbers together?"
  
  
• "A lot of folks had surprise tax bills this year. Mind if I check if there were any life changes that might have affected things?"
  
  
• "Getting a refund actually means you gave the government an interest-free loan all year. Owing a bit might mean you kept more of your money throughout the year."
  
  
• "Tax laws changed quite a bit recently. Many people who usually get refunds ended up owing this time around."
  
  
• "Can we look at your withholdings? We might just need to adjust those so you don't have this surprise next year."
  
  

Conclusion

While it can be challenging to deal with clients who blame you when they find out they owe taxes, there are strategies to manage these situations effectively. By educating clients, providing ongoing tax strategy, implementing upfront payment policies, and being selective about clientele, tax pros can reduce the likelihood of blame, set client expectations appropriately, and foster better relationships with their clients.