Sounds like a great marketing idea: Sit down with a prospect and tease them with just enough expertise to whet their taxpaying appetite. And according to a recent practice survey by the National Association of Tax Professionals, more than half (58 percent) of tax preparation firms offer free consultations.
“I generally offer free refund estimates to prospective clients, in addition to answering any tax-related questions,” said preparer Andre Jerry, president of MTG Incorporated Financial Management Services, in Atlanta. “I find that giving free tax advice builds trust and rapport with prospective clients and goes a long way in building a customer loyalty.”
So how come practitioners often feel bilked after these chinwags?
“I found that people would pump me for information and then would do [return prep] themselves,” said San Antonio-based CPA Susana Lozano, who no longer gives free consultations. “One lady kept calling to remind me that she would eventually hire me to do her books and taxes and always followed up with a tax question. After about the fourth time, I told her I could no longer help her. It took me a while to catch on, but in my defense I’d just started my practice and wanted to please potential clients.”
“My standard policy on free consultations has always been, ‘The first hour is free and by then you and I know if we can work together,’” said Martha Nest, an Enrolled Agent at Westview Tax Services in Bardstown, Ky. “In the past, this was no problem. The questions dealt mostly with Schedule As and so forth. But the other day I got a phone call from someone who is not a client saying that I was recommended as an expert. The first question was easy: ‘If I e-mail my paystub, can you tell me if my earnings are too high to claim the American Opportunity Credit for my son’s first year of college?’ Piece of cake. Second part of e-mail was, ‘My wife and I have formed an LLC and I plan to become a “day trader” for the LLC so I can accumulate $22-$25k to start another business. I understand that the LLC will prevent me from paying taxes. Can you tell me how this works..."
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Source: Jeff Stimpson (www.accountingtoday.com)
