No one wants to think about taxes right now, especially as the nation gets a glimpse of post-pandemic life. Navigating the chaos that 2020 wrought on finances seems like torture.
But as April 15, the deadline for filing, looms, tax professionals are working harder than ever.
“We had to make the very difficult decision last week to not accept new clients. We’ve never done that in 33 years. I’ve checked with some of my friends across Vancouver and across the country, and no one is taking new clients,” said licensed tax consultant Terry O. Bakker, who owns O’Leary Tax Service.
Midway into March, she’s working 12-hour days trying to find answers to some of her clients’ most complex questions about finances during 2020.
“It’s because of all of these changes, people’s stories and having to do it via Zoom,” Bakker, a certified public accountant and enrolled agent said, adding that returns are taking “twice as long because there’s so much more you have to find out.”
The Columbian caught up with the 54-year-old Portland native to learn more.
2020 was a year like no other. How has it impacted business operations?
We basically spent most of 2020 learning and adapted our business model so we’re virtual.
We’re down two people because of social distancing; we couldn’t make it work.
We’re under a huge amount of restrictions with regard to client confidentiality. As tax professionals and accountants, we are one of the leading marks for identity thieves; they go after us. (The Internal Revenue Service) has cracked down to make sure all of our systems are secure and doing everything we can. Everything is double encrypted; no one can see another client’s name.
We had to transition to not only locking down our offices and servers but also if we have an employee at home, I have to lock down their house. We had to invest a lot in tech and virtual private networks and encryption, and upgrading internet access at the employees’ homes who chose to work from home. The fines on us for not protecting our clients are very high from the IRS.
We also did a lot of pro bono work last year. People wanted us to fill out their Paycheck Protection Program applications, but we were prohibited from doing that. Trying to understand how the Department of Labor rules under emergency sick and expanded family leave would impact our clients … it wasn’t just the typical issues people face. It was a huge learning curve for people in our profession; suddenly we had to touch on these other federal agencies.
People just calling in, asking “Where’s my stimulus? How do we look that up?” We didn’t charge clients for the time we spent looking that stuff up because I got into this profession a) because I’d always have a job but also b) it was my idea of how I would help people.
You mentioned pending legislation – what exactly will have an impact on your job?
Everything (laughs). The biggest one that’s hitting right now is unemployment, making the first $10,200 per return nontaxable. Forty-five million people have already filed. We went through our returns, and we have 32 returns that we will have to amend because of that change, and they already paid. Things are going very slow because we’re hesitant to file. Weeks before the filing date, we have to sit down and study new laws and how’s it going to impact clients. We still don’t have all the answers on legislation.
Are tax firms able to directly contact the IRS?
No. We have the ability, if we have a question on an individual tax return, to talk with a representative, but the typical hold times are between an hour and two hours. As far as just a question on interpretation, the IRS will not answer interpretation questions on the phone. If you have a question on an interpretation, you have to submit it to the Office of Chief Counsel, then wait about six months until someone can get back to you. So the answer is, not really.
So it’s chaos.
Yeah. You have the haves and have-nots; people are hurting. People will go and go and use whatever office software and do their own taxes. Well, just between economic impact payments, disaster – what software is going to lead you through that and ask the correct questions? There’s so much it can’t tell you. When I’m teaching new professionals, the thing we focus on: Our job is to get the story from the client to understand the client and story and translate that into a tax return. You’re not going to have the same story for every client. You can’t ask the same five questions for a tax return.
What are your hopes for the future?
We hope to get back in front of our clients again to not lose too many of these relationships. It’s very hard to have a conversation with a business client and say “There’s no path forward, and you need to close your doors,” and it’s being done over a Zoom call. And also working again with people to prepare for these life events that we don’t prepare for – to prepare and not just live for today. That’s the one thing I hope the pandemic will teach people: There’s some future we need to live for and prepare for. There’s not going to be someone out there to fix everything for you when you run out of money.