Tom Tate and Shawna Robinson, partners at Woodrum, Tate & Associates, plop down at a boardroom table and offer visual aids to the income tax complexities they must unravel every year at this time.
Documents bearing government edicts and held together by paper clips sit next to a binder so thick it takes two hands to lift.
Among the clutter is a manual called the Internal Revenue Code, which contains nearly 4,000 pages as thin as onion skin.
“You have your client demands, your deadlines, keeping staff motivated and doing things timely, efficiently and accurately,” Tate says of the pressures inherent with the job. “It’s constant.”
Tax preparation is big business in the United States.
Tax professionals reported revenues of about $11 billion in 2018, according to the site franchisehelp.com, and about a quarter of a billion tax returns are expected to be filed this year.
Of the roughly 79.2 million returns filed electronically this year through March 22, about 53 percent were done professionally instead of self-prepared, according to the Internal Revenue Service. The filing deadline for 2018 tax returns is April 15 for most taxpayers.
“It really gets kind of crazy in the last couple of weeks,” says John Grace, a shareholder with Stanfield and O’Dell in Tulsa. “We’ll work 60 or more hours a week with all our staff just to get caught up, and even then you still have to file extensions, sometimes.”
Stanfield and O’Dell has about 43 people on staff in Tulsa, 17 of which are in the tax department, he says. Focusing on businesses and nonprofits, company leaders stay in steady contact with customers through email and face-to-face contact, meeting a number of clients on a quarterly basis, Grace says.
“The main way you keep clients is to provide good service,” he says. “It has to go beyond talking to them once a year and doing their tax return.
“It has to be talking to them during the course of the year about where they’re headed, what their plans are, what they can do to maybe reduce their taxes. If they are a business, is there a way to operate their business more efficiently?”
The bulk of tax preparers are small businesses: 37% are operated by a single person and 53% employ fewer than 10 people, according to the site franchisehelp.com.
Most CPA firms bill by the hour, with the rates ranging from $100 per hour to $400 an hour depending on who’s doing the work and how complex it is, Grace says. The Oklahoma Accountancy Board mandates, among other things, that a minimum of 20 Continuing Professional Education (CPE) hours must be earned and reported in any single year and at least 120 hours must be earned and reported in each rolling three-year reporting period.
“And then when the laws change like they just did this past year so dramatically, you spend extra time trying to ramp up and understand what it is before people start bringing their tax stuff in and how does this apply to me?” Grace says.
Clayton Woodrum established Woodrum, Tate & Associates in 1984. It now has a staff, excluding the three partners, of 17, eight of whom are dedicated to tax. One woman on staff worked 90 hours in a recent week, Tate says.
But all the employees, including partners, must step up their game. At this time of year, Robinson says she logs 12- to 13-hour days Monday through Saturday and about eight on Sunday.
The feds bear some of the blame for the extra labor.
Enacted in late 2017, The Tax Cuts and Jobs Act produced the most sweeping tax law change in more than 30 years. Often referred to as tax reform, it affects nearly all taxpayers — and the 2018 federal return they’ll file this year.
“This is the most complicated year in my career,” Robinson says. “There are changes every year. But generally, they kind of build on each other. This is like the first real change I’ve been through.”
Woodrum, Tate & Associates does returns for many family-owned small businesses — with a focus toward the oil and gas industry — along with work for medical professionals and some families, Tate says.
“One of the difficult things is dealing with the IRS, the government,” he says. “They had the shutdown, and that just pushed everything back. That’s one of the biggest challenges is when something gets astray and getting it straight with them.”
To format all the returns, the company pays $36,000 annually for tax software, Tate says. And because it has an abundance of personal client information, an outside source does computer security.
Getting to the finish line, however, makes it all worthwhile, Tate says.
“We have several clients that had big transactions, and we had some clients that had a lot of growth and went through owning three businesses to eight businesses,” he says. “And they’re the type that drag their feet. Circumstances that you can’t control, that’s where you have to be flexible. You have to be able to roll with the punches.”
“At the same time, you’re trying to hold yourself to the highest standard possible because you want to A, be efficient. You want to be accurate and you want to be timely.”
No comments:
Post a Comment