{"id":7841,"date":"2011-03-29t13:00:57","date_gmt":"2011-03-29t17:00:57","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=7841"},"modified":"2023-07-07t12:06:26","modified_gmt":"2023-07-07t16:06:26","slug":"the-24-personalities-of-individual-tax-returns-and-the-clients-behind-them","status":"publish","type":"post","link":"\/\/www.g005e.com\/2011\/03\/29\/the-24-personalities-of-individual-tax-returns-and-the-clients-behind-them\/","title":{"rendered":"the 24 personalities of individual tax returns (and the clients behind them)"},"content":{"rendered":"

editor’s note: one day at the offices of frank j. pavlica cpa in inverness, ill., it dawned on the folks that tax returns, like clients, have their own personalities. so far, they’ve identified at least 24.<\/strong><\/p>\n

by elisabeth whitlock, jane hamer, susan holberg, marilyn aman and frank pavlica, who adds, “jane is the office manager, elisabeth, susan and frank are cpas and marilyn is the best tax person around.”<\/em><\/p>\n

having prepared tax returns for a number of years, we have come to the conclusion that individual income tax returns have their own personalities as do the taxpayers that they represent.<\/p>\n

take for example, the tax return that has w-2 income that just won\u2019t quit but does not have any investment income.\u00a0 we call this one the (1) \u201cspender\u201d<\/strong> because i always wonder \u201cwhere the money went.\u201d\u00a0 but when you ask the question, the answer is usually \u201ci don\u2019t know where the money went, but if you find it, let them know.\u201d\u00a0 (i never found it.)<\/p>\n

we have the opposite\u2014the (2) \u201csavers.\u201d<\/strong> they are the ones that have huge amounts of interest and\/or dividend income compared to their w-2 income. they have many bank accounts and own many individual stocks.\u00a0 so, they want each piece of income listed separately on the tax return instead of showing it any other way. too bad the banks don\u2019t give away free gifts anymore\u2014these people would be able to fill warehouses.<\/p>\n

then we have the (3) \u201cgenerous\u201d<\/strong>\u2014the cash and non-cash contributions to charitable organizations that are equal to or better than the tithe.\u00a0 just wonder how much of this is true. now that the irs has changed the rules regarding receipts, the \u201ccash\u201d contributions have gone down compared to the past.\u00a0 \u00a0and the (4) \u201cstingy,\u201d<\/strong> whose income is high, but contributions are low.\u00a0 i guess charity does start at home.<\/p>\n

the (5) \u201caggressive\u201d<\/strong> are the ones with deductions that are so large, that it scares me just to read them.\u00a0 the amount are always rounded numbers like \u201cpublications $2,900\u201d. amazing how this all adds up to round numbers<\/p>\n

and the irs\u2019 favorite kind of taxpayer \u2014 the (6) \u201ctimid.\u201d<\/strong> yes, those are the ones that are lucky to have claimed \u201cexemptions\u201d for themselves.\u00a0 they should get a birthday card from the irs every year because they never try to deduct even the most deductible expenses.\u00a0 remember the old joke\u2014\u201cwhat did you make, send it in?\u201d that is why they are the irs\u2019 favorites.<\/p>\n

even the address on the tax return can tell you something. sometimes the spouses live in separate states. you hope one day they can live in the same taxing jurisdiction. then there are the complicated family structures where the identity of dependents changes from year to year (john in even years and joey in odd years).<\/p>\n

then there are the (7) \u201csneaky.\u201d<\/strong> these are the clients who come to you with a complicated question in the middle of tax season. they know the answer they want, and ask very specific questions to lead you there. you have to pay close attention, no multi-tasking (or \u201cmulti-taxing\u201d) when listening to these clients.<\/p>\n

the (8) \u201cself-starters\u201d<\/strong> are risk takers. you usually see them with a schedule c. these entrepreneurial taxpayers are not afraid to start out on their own. schedule e (rental income) taxpayers have a lot in common with the schedule cs, but they are one step down in aggressive risk taking. they prefer to manage concrete things like buildings, rather than stocks or other financial instruments. interestingly, you hardly ever have a taxpayer with both a schedule e and schedule c, unless they are a real estate professional. the real estate pros follow the old adage, \u201cinvest in what you know.\u201d schedule f taxpayers, the gentlemen farmers, are even more risk averse.<\/p>\n

some taxpayers take a more laid back (\u201cpassive\u201d) approach to investing, preferring to let others do the work. you can tell these taxpayers by their passive income k-1s. a subspecies is the taxpayer with multiple k-1s from non-publicly traded partnerships. these are usually investment partnerships bought through a \u201cfriend\u201d. these taxpayers have a taste for exotic investments.<\/p>\n

then we have the (9) \u201cex-factor\u201d<\/strong> taxpayers\u2014either payers or receivers of alimony. sometimes you think of the recipient as receiving a benefit from her or his term of service with the ex. on the other hand is the divorced taxpayer who is not<\/span> paying alimony. you wonder what he gave up in the settlement \u2013 probably a lot.<\/p>\n

also on page 2 of schedule e are the (10) \u201ctrust fun babies\u201d<\/strong> with a \u201csimple\u201d trust that keeps feeding them but they never grow up. (who wants to?)<\/p>\n

then we have the (11)\u00a0 \u201cdouble dippers.\u201d<\/strong> these are taxpayers taking a pension while still drawing a salary. however, if the taxpayer\u2019s retirement distribution is accompanied with the 10% penalty tax, they have a different issue.<\/p>\n

you also have the (12) \u201ccredit seekers\u201d<\/strong> who use every tax credit that they can qualify for. these are taxpayers who have positioned themselves during the year for a nice credit, either through an energy-efficient vehicle or home improvements.<\/p>\n

taxpayers also have their own habits of dealing with their tax information. there is the (13) \u201cdribbler,\u201d<\/strong> who sends in his information piecemeal. you may receive 20 different submissions from him. it\u2019s hard to know if he\u2019s better or worse than the (14) \u201cholder,\u201d<\/strong> the client who doesn\u2019t give you anything until april 14 because he had to wait for that last k-1 to complete his packet of tax information.<\/p>\n

then there is the (15) \u201cblender,\u201d<\/strong> who sends you tax information spanning several years. not only do you have to cull the documents to find the current years\u2019, but sometimes you find a document from a prior year that you have not seen before, forcing you to amend that prior year.<\/p>\n

the (16) \u201cconfused\u201d<\/strong> is the taxpayer who lets his broker handle all his investments. this taxpayer has no clue about his financial situation. he doesn\u2019t know how many brokerage accounts he has or what transactions have been made throughout the year. an even more extreme type is the client who doesn\u2019t know his own occupation or whether he had any income or expenses on his schedule c. the most extreme example of the “confused” taxpayer i have ever encountered is the client who filed under incorrect social security numbers for both himself and his spouse for over 25 years. but perhaps the irs was really the confused one here, because they accepted the returns!<\/p>\n

the (17) \u201cmeticulous\u201d<\/strong> is a client who provides every medical and prescription receipt. or how about the (18) \u201coverkiller\u201d<\/strong> who gives you every single receipt from the tax year and expects you to decide what is deductible.<\/p>\n

the (19) \u201clazy\u201d<\/strong> is the client who doesn\u2019t provide all his information, but expects me to find it out for him. he wishes i would contact his mortgagor, his real estate tax assessor, his employer, and his broker, for, respectively, his forms 1098, real estate taxes, w-2, and 1099s. then there are the clients who are not so much lazy as unreasonable, such as the teacher who claimed unreimbursed business expenses that were much higher than last year\u2019s, but provides receipts for only half that amount.<\/p>\n

the (20) \u201cone-timer\u201d<\/strong> is the client with an otherwise straightforward return with one unusual item, such as a railroad pension, requiring hours of research.<\/p>\n

the (21) \u201cparent\u201d<\/strong> is a taxpayer who wants you to do his grown children\u2019s returns but can\u2019t get the w-2s for you, or is unsure what states their children worked in.<\/p>\n

the (22) \u201cprofessional\u201d<\/strong> is an accountant who doesn\u2019t want to do his own tax return. watch out! they will often try to get you to do something they wouldn\u2019t do themselves. i am reminded of a client who paid $50 at a charitable auction for an item that was worth $200 and wanted me to deduct $200.<\/p>\n

interesting, and thankfully rare, is the (23) \u201ci never asked\u201d<\/strong> client. he is the one who files mfj for the first time and doesn\u2019t know his spouse\u2019s legal name. another kind of relationship problem was indicated by the unmarried couple who bought a house together. one client wanted to claim 100% of the first time homebuyer credit on his return without telling his partner \u2013 not a great start to the relationship.<\/p>\n

the (24) \u201crusher\u201d<\/strong> is the client who brings in his information late and then tells you, as an aside, that he needs the return completed asap for fasfa.<\/p>\n

some clients are beyond aggressive \u2013 they are living in a fantasy land, such as the client who wanted me to deduct her dog\u2019s veterinarian bills.<\/p>\n

some clients just have a harsh manner. they are so irritating when they drop off their information that you want to code the file with a j, a or d (jerk, a******, or d***).<\/p>\n

some clients surprise you. you wonder how a little old lady ended up with 6 rental properties.<\/p>\n

we’re sure you have your own nicknames for some of the returns that you prepare.\u00a0 let us know what they are in comments<\/strong><\/span><\/a>.<\/em><\/p>\n