Lessons Learned the Hard Way

Ever since my children began to drive I gave them some of the same advice that my dad gave me. One was to never to bring the car home empty and always fill up when the tank was about a quarter full. Recently, my daughter (and I hope she doesn’t see this) ran out of gas on the interstate. And as she sat there for nearly two hours waiting for the roadside assistance truck to pull up, those words of advice ran through her head. When she got home I ask her if she thought she would wait until the gas light came on again before getting gas.  Her answer was that she had, unfortunately, learned her lesson the hard way.

I would think at my age that I wouldn’t have to learn lessons the hard way.  But, recently I too have had to learn something the hard way. Hopefully, these suggestions below might prevent someone else from having to learn this lesson the hard way.

Almost 5 years ago had a disagreement with a company. I believe I went above and beyond what would be considered normal to resolve the issue. However, no resolution seemed to be forthcoming. I informed the company what my position was and what my actions were going to be. Obtaining no objection, I followed through on what I stated I was going to do. Now, five years later, they are approaching me again.

Here are four suggestions:

  1. Document. Document – With any business transaction, there is no such thing as not enough documentation. Documentation should contain the party or parties that were present, what was discussed, the date, and the time.  In my case, I actually went to this company’s office and documented where those offices were located, who I spoke to, as well as the date and time that I was there. I also documented what the next steps were to be at the end of that conversation.
  2. Rewrite Your Notes – Taking notes during a conversation can be difficult. Taking the time after the meeting while the conversation is fresh to rewrite the notes can help insure that all the important points are covered.  If there are some items that are unclear, don’t hesitate to speak with your contact and get it cleared up.
  3. Stay Organized – Keep the notes in a chronological order. If documentation such as forms, logs and agreements were discussed, insert a copy of those documents in the notes where they were discussed. This way they can be easily retrieved when necessary.
  4. Save. Save – if documentation is a key component, then so is saving. Your documentation should be saved at least until the statute of limitations has expired, which is usually seven years. This is the mistake I made. After about three years, I had not heard anything, so I assumed that this matter was over and I destroyed my documentation. Now, five years later, I’m scrambling to try and remember and piece together the sequence of events. With digital storage and the cloud, there is no reason not to save this information in a form that takes little space, is easy to retrieve, and can be kept for an adequate amount of time.

Unfortunately, I guess we all learn things the hard way from time to time.  But for me, I won’t get caught by this one again.

You Have Never Asked for That………..

There are days, usually on Mondays, that I would really like everything to standstill for just a little while.

However, that just does not happen.

Everything seems to be in a constant state of flux.  Unfortunately, the Income Tax system is a good example of that constant change.  At least, it seems that way to me as I deal with it from year-to-year.

This year appears to be no exception for changes. While there are not too many changes to the actual tax laws there is a great many changes to the documentation that is being required. The Internal Revenue Service is putting an emphasis on security and deduction verification this year.  Therefore, we will be asking for things we never asked for before such as a copy of an individual’s driver’s license or a copy of their Social Security card. This year will be asking for those things because we are being required to prove people’s identity.  We cannot file a return without the driver’s license number.

In addition to documenting people’s identity we are also being required to document the existence of children. Therefore, if the taxpayer qualifies for a child tax credit, we are now required to ask for proof of the child’s existence such as copies of school records, healthcare provider records, etc. This one really drives me crazy. I’ve been in business for 15 years and some of these kids I know.  They have come in with you at times when you’ve come to ask questions or pick up your tax return. Therefore, I know they exist, but I still have to ask the questions and document the answers.

For dependents that are in college, depending on the information that we receive, we may have to do additional verification for them as well.  If a tuition tax credit is being claimed, that information cannot even be entered if we do not have the 1098 – T.

I can only imagine how annoying this seems to the taxpayer. It places an additional burden on the tax preparer and we are subject to penalties and fees if we don’t comply with the new documentation standards. And ,as you would expect, all this additional work takes more time and drives up cost.

Hopefully, this will give you a heads up as to what we will be asking this year for documentation. Some folks who showed up early have already said, “You have never asked for that before”.

And they are correct, but we have to ask for it now.  So, please bear with us.