Tax Pros Relied Upon For Pandemic Loan Services

Surcharges related to the expenses of doing business in the pandemic — cleaning, training, personal protective equipment — are starting to appear in businesses such as dentists’ offices and restaurants. Have tax professionals and accountants begun charging more for special accommodations such as in-person meetings or special services such as Paycheck Protection Program loan forgiveness consultation?

Though they’ve certainly shifted how they meet with clients, so far, practitioners say mostly no.

Bruce Primeau, a CPA and president at Summit Wealth Advocates, in Prior Lake, Minnesota, said that his firm isn’t charging for the “handful” of face-to-face meetings over the last months: “I asked the person responsible for setting client meetings to ask each advisor individually first whether they’re comfortable meeting with anyone face to face. Only if they say yes do we offer the option to a client.”

“We had a package (flat fee) that was for consulting on the various programs available and possible impact to cash flow,” said Chris Hardy, an Enrolled Agent and managing director at Georgia-based Paramount Tax and Accounting. “For those who didn’t want to pay for the full package, we did charge hourly for consulting services.”

“I haven’t had in-person meetings after March 15,” said Brian Stoner, a CPA in Burbank, California. “All done by phone, email or Zoom. This is part of my free services this year. I’ve also helped clients with their estimated PPP loan calculation when they applied and also told them what the numbers were for the forgiveness calculation. I never filled out any of the forms, just giving them information to fill out themselves. I haven’t charged for this service this year.”

PPP work

Historically, preparers surveyed tended to raise their tax prep fees about 5 percent a year, with higher increases coming in the wake of tax law changes or the retooling of forms.

But history has little precedent for the pandemic-related programs that created more than an extra-long season for preparers. They also created new work, such as helping business clients secure the PPP loans — and what is likely for many struggling companies to be the all-important loan forgiveness afterward.

“This is a new experience for CPAs,” said Scott Kadrlik, managing partner at Meuwissen, Flygare, Kadrlik & Associates, in Eden Prairie, Minnesota. “Our clients deal with their banks for loan funding and we help provide the information for programs that have been around for a long time. The PPP is new with little guidance from the SBA and the banks know as little as we do about the programs.”

“We have not charged our clients for time spent on PPP issues unless there was significant information and time spent on the process. Mainly our time was spent answering questions and interpreting SBA information,” he added.

“We will certainly charge for PPP loan forgiveness consultation because a successful loan forgiveness application can save the borrower a lot of money,” said Lawrence Pon, a CPA at Pon & Associates in Redwood City, California. “We can help them with this workload.”

“This is similar to a taxpayer representing themselves in an audit versus hiring a tax professional. I’ll certainly be charging this based on my hourly rate,” he added. “We can’t charge based upon the results of the loan forgiveness.”

EA Debra James at Genesis Accounting & Management Services, in Lorain, Ohio, said her firm helped many clients with the PPP loan application process — assembling documentation such as payroll returns, income statements, business schedules and business returns — and in some cases completed the application for the client and spoke to the lenders to answer additional questions.

“Much of this was done without client meetings, and there was no additional charge if a meeting was required,” James said, adding that fees ranged from $150 to $250 “depending on the degree of involvement needed.”

“As yet,” James added recently, “no services have been provided for loan forgiveness applications … When services are requested, time will be billable comparable to the original application fees.”

“I bill hourly. If I do additional work for clients that involves more than a quick response, I bill for it,” said Phyllis Jo Kubey, an EA in New York.

Meetings and obligations

Some firms have a jump on professional social distancing via technology, but basic swapping of information remains different these days. “I work out of my home and I’ve worked with almost all of my clients virtually for many years,” said Kubey, who lives in a doorman building. “Clients can drop off hard-copy documents when they wish and I can leave documents for them to pick up without direct contact. For the few clients who needed an in-person meeting, we met outside, masked.”

California’s Pon said his firm doesn’t charge for special accommodations. In-person meetings in his area stopped in March. “Many clients were very upset when that happened,” he added. “For the upcoming season, we have no plans for in-person appointments.”

“After the 2019 filing season I realized how much of my time was being consumed by client meetings. I added client meeting and a specific charge to each invoice sent out in 2019,” said Mary Kay Foss, a CPA in Walnut Creek, California. Foss said she did close her office and that her whole building was shut down.

“For some clients, I’d meet them at the door of the building to retrieve their hand-delivered packets,” she said. “Our county shut down on March 17 and there were only a handful of in-person meetings before that. Those meetings were included in the 2019 preparation invoice.”

Perhaps one reason preparers haven’t followed dentists and restaurants is a sense of continuity with clients. “Our goal during this time is to help our clients maximize revenue, watch expenses and do everything they can to stay in business,” Kadrlik said. “They never forget who helped them through this uncertain time.

Top Tools For Tax & Accounting Professionals To Automate Tasks

In recent years, more and more tax and accounting professionals are embracing computer technology to become more efficient in their practices and to keep pace with their clients’ needs. As a result of the outbreak of the global pandemic last winter and the physical distancing guidelines that followed, tax and accounting professionals are turning to technology to get their work done without having to meet with their clients in person.

As the tax and accounting profession shifts more towards advisory services, leading firms are leveraging technology to automate low value work like data entry, categorization, file exchange and cleanup.  The following article discusses some of the top tools that help firms automate tasks.

Cloud-based Income Tax Software

Browser-based income tax software has many advantages over traditional, desktop software and helps the tax professional’s office run more efficiently with compliance type tasks. This leaves more time to provide advisory services and better work / life balance. Depending on the software here are the potential benefits: A true online offering can run on a Mac or PC and the user doesn’t have to worry about installing and updating the software periodically, like you would with desktop software.  There is no maintenance, IT, and computer servers required — which will save the user time, money, and stress in the long run.  Client data is automatically backed up in the cloud.  The online software is more suitable for remote employees and multi-site firms. 

Cloud-based Accounting Software

Browser-based accounting software has similar advantages as online income tax software and more. Cloud accounting software does the heavy lifting so you can spend your time on other important business tasks. Depending on the software here are the potential benefits: The small business owner and accountant have the flexibility to sign in from anywhere with an internet connection and no hosting service is required.  You can access the account from any device–including laptops, smartphones, and tablets.  Multiple users can be logged in at the same time, working in the same books and making real-time updates.  The business owner can allow the accountant to access the books to answer questions, fix problems and get the books ready for tax time.  This eliminates the need to transfer sensitive data back and forth. Data is routinely backed up to servers in multiple locations. No physical hard drives or computers containing sensitive data that can be stolen are necessary. Since financial information isn’t kept on the premises, the risks of fires and natural disasters are also mitigated.  You can automatically sync your bank accounts so you don’t have to manually import transactions or verify expenses. 

Client Portals & Document Management

Sharing documents and collaborating with clients through a client portal can have lasting benefits and advantages. This is especially true when the global pandemic forced the accountant and client to meet in person less often, or not at all. An integrated client portal (such as Intuit’s Link) makes it easy for your clients to deliver their tax data to you in a timely and organized way. Depending on the solution, you can do the following tasks through a client portal:Collect and organize your clients’ information (such as W-2s and 1099s) through a secure online portal. This avoids the risk of sending your clients’ confidential information by mail, email or unsecured file-sharing and protects the documents with encryption.Request, share documents, and easily apply them to the tax return. This reduces manual input errors by importing the data directly from your clients’ documents and financial institutions.The tax professional can stay in touch with their clients through the portal by delivering reminders about estimated taxes, updates on tax law changes, information about firm events and other announcements. A document management solution allows you to upload documents, store them, view them as you do the return and download them if needed. 

Practice Management

A practice management solution allows tax firms to gain more visibility and control over everything they’re working on, while reducing time spent on recurring tasks so they can be more hands-on with every client. Here are some key attributes of practice management software: Automate and standardize your firm’s operations so nothing falls through the cracks. Get complete visibility into all of your work at a glance or drill into the details, which allows for enhanced efficiency across your workflow. Share data across hundreds of integrated software and go to one place to look at all your applications. An efficient way to conduct and track time and billing responsibilities.

Electronic Signatures

The IRS allows e-signatures for Form 8879, IRS e-file Signature Authorization, for individual tax returns.  To help reduce in-person contact and reduce the risk to taxpayers and tax professionals during the pandemic, the IRS temporarily expanded the list of forms they’ll accept with a digital signature (IR-2020-194).  Check with your state to see if they allow for parallel functionality.  An e-signature solution reduces cycle time, improves the tracking of authorizations and allows for clients to sign via a mobile device.