say hello to the new 24-month busy season

covid chaos turns busy season 2020 from bad to worse.

busy season barometer:
how accountants are battling the coronavirus recession
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by 卡塔尔世界杯常规比赛时间 research

last year—the good old days!—busy season seemed to be about as bad as it could get. congress enacted the tax cuts and jobs act without explaining how it was to be enacted, and then changed some things. and then the irs shut down before the rules could be set and the new forms and schedules made available. and all of a sudden it was april 15.

more on the 2020 season: the mystery of 10 million missing tax returns | tax pro e-filings down 20 percent | irs web traffic doubles over year-ago | covid drowns irs in new filings | 2020 tax season comes to a screeching halt | the tax season 2020 dumpster fire | tax pros fall behind 6.2% in returns filed
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tax practitioners had little good to say about 2019. according to last year’s 卡塔尔世界杯常规比赛时间 busy season barometer, 46 percent said 2019 was worse than the previous year. only 13 percent thought it was “much better.”

that was then.

this is now. and, now is worse.

only half as many accountants—just under 7 percent—think this year is “much better.” and 52 percent say this year is “much” or “somewhat worse” than last year’s bad.

what’s next? maybe the endless busy season.

some leading figures in the profession see tax season blending into the ppp loan forgiveness season. even next year’s tax deadlines are in doubt, according to deanna hill and mike shost, speaking at the aicpa’s annual engage conference this week.

“it could be a two-year thing,” hill told an online room of about 200 still-reeling accountants. “we could have a 24-month tax season.” the poll in the room found as many groans as 卡塔尔世界杯常规比赛时间’ polling, with 52 percent calling it “terrible” and only 4 percent calling it “great.”

the pressures of circumstances

it’s too early to ask what to expect next year, but its doubtful covid-19 will be under control, and the odds of the economy booming are somewhere between zero and zilch.

new jersey-based cpa robert sagedy says this year is only “somewhat” worse than last year. still, he expresses a common complaint: “i lost a number of clients i was not expecting to lose,” he says, “and the pressures of circumstances during the season caused more stress than usual.”

not everyone lost clients, but everyone felt the pressures of circumstances.

“the stress was horrible, the hours were long, the staff was ineffective, the clients were irresponsible, the security issues were daunting, the tax law was byzantine and conflicting,” moans jonathan rivlin, head of a small firm in maryland. “the virus just took away whatever fig leaf was there, but the season was as horrible as any other season.”

in the trenches of business

the main circumstance, aside from actual illness, was, of course, the economy. last year, despite the early-season government irregularities, only 6 percent of responding practitioners were concerned about the economy.

a year later, the number exploded to 60 percent, a dizzying increase of 934 percent.

apparently, the stock market isn’t fooling cpas. they work the actual numbers, in the actual trenches, of the actual business. and what they see isn’t good. their clients are failing, disappearing, or looking for a more affordable accountant.

• last year, with the irs shut down during the opening of the season, 29 percent said irs operations were of concern.
• this year, with the irs shut down once again, concerns over the service more than doubled, rising at a 52 percent rate, to just over 60 percent of accountants.

and things aren’t going so well at home, either.

• last year, only 10 percent were concerned about personal or family issues.
• today–with the kids home, grandparents in jeopardy, and spouses in shaky employment status–concerns with home life more than doubled (by 115 percent) to 21 percent.

desperate times can lead to desperate measures. though, so far, measures haven’t been of pandemic proportions.

there’s been an uptick in concern about competition from other tax and cpa firms. the absolute numbers are still low, but the rate of increase is high.

• last year, only 3.65 percent were worried about the competition.
• this year, it’s 6.23 percent, an increase of 77 percent.

an issue of niches

judging by explanatory comments coming into the barometer, the competition hasn’t been a matter of pricing. rather, it’s been an issue of niches.

tax services this year are different from last year. if clients switch providers, it’s because they have different needs—help with federal and state programs and unprecedented write-offs, rather than filing returns.

all these worries are making the concerns of the past fade in comparison.

• late or erroneous k1s, 1099s, etc. bother only 18 percent this year, roughly half of last year’s 37 percent.
• concerns with unprepared clients dropped 22 percent.
• tech and software woes dropped 39 percent.

joe eckelkamp, the founder of the e&a cfo group in st. louis, offers a generous comment that sums up a lot of what we’ve heard.

“a very disrupted season with slower arrival of information but, more than anything, the chaos of the original ppp and its incessant changes created havoc for clients and the firm alike. it was a cluster-#@%! for all. and it interfered with our ability to serve even those clients not directly affected by it because several clients facing existential threats from covid could not survive without our immediate assistance on ppp. all tax work stopped for a while to help with that. we were hit with a stay-at-home order on march 23, but the use of thomson’s virtual office product, a sophisticated call forwarding capability in our phone system and regular communication among the team mitigated the negative impacts. there was, however, a surge in revenue from non-tax services.”

next year? hard to say. maybe better. maybe worse. most definitely interesting.

but who can even look that far ahead?

posted on july 23, 2020