QUICK RECAP: On Presidents Day, I had Liberty Tax prepare my 2013 individual tax return. The main motivation was to get a blog post (Done!) and a video (Nailed it!) and a photo opp (More phallic than intended!).
Now, you probably don’t know this about me, but I pretty much suck at taxes. I mean, I can do them, but I pretty much suck at it. My first year in the accounting profession was at a CPA firm, and I did zero individual returns. They left those for the interns because the interns were considered smarter than me.
After Liberty prepared and e-filed my return, they sent me home with a copy, and I quickly went over it to see if there were any glaring mistakes. Everything looked okay. I did notice that I didn’t get the child tax credit, so I re-did the math, and sure enough, we didn’t qualify.
Jody Padar of New Vision CPA Group, after reading last month’s post, contacted me and asked if she could review the Liberty return for accuracy. Uh … yes! Like I said. I kinda suck at taxes, and this way I could have a top-shelf tax pro help me take this experiment to its logical conclusion.
Here’s what we did: I sent Jody all of my 2013 tax documents and my 2012 Federal tax return, but not the Liberty return. (I also didn’t send my 2012 state return since I figured this was only going to be an academic exercise to see if Liberty screwed the pooch). The plan was for Jody to do the return independently and then compare the results.
She called me with some questions about my business travel and per diem expenses. (I had explained those to Liberty as well.) She also asked me some great questions that Liberty did not.
I didn’t claim any non-cash donations to charity. Jody asked if I had dropped anything off at the Goodwill or Salvation Army. I had, but I didn’t feel good about claiming any of it. You see, in 2013 I was conducting this other experiment where I regularly dropped of really small loads of crap, and tried to get as many tax receipts as possible. One time I dropped off one pair of shoes, said the donation was from three different taxpayers, and therefore, and asked for three tax receipts. Bottom line, I felt like my non-cash donations were really just a way to keep my garbage can from overflowing, so I insisted on not claiming any of them.
Jody also knows from personal experience and from my Schedule C that I do standup comedy, and she asked if I had any costuming expenses. Unfortunately, no. However, that will all change in 2014 because I plan on doing all my standup dressed like the lead singer of Judas Priest.
After Jody finished my return, I sent her the Liberty return, and she had a chance to glance at them side-by-side before I did. She sent me a quick email to let me know that she had gotten me a refund (the Liberty return showed me owing $1,497), but she also said the huge difference was causing her to second-guess her understanding of my travel expenses.
A few days later, I pulled up the two returns and went through them line-by-line. And then I shit my pants.
The Liberty return missed the fact that I HAVE TWO KIDS. You know, the same two kids that were listed prominently on the front on my 2012 return. The same two kids who came with me one of the three times I had to go back to Liberty Tax.
No, wait. Check this out: They had me fill out an intake sheet which asked me to list my dependents, including their social security numbers. I don’t have those memorized, so I asked the lady – who was putting my information into the computer – if I could see my 2012 return so that I could copy my kids’ SSNs from one document that I provided them to another document that I was providing them. Seemed like busy work to me. Turns out it was.
Now, I’ve mentioned that I suck at taxes, but the first time I double-checked their work, I didn’t even bother to check to make sure they included my kids as dependents BECAUSE NOBODY MAKES THAT MISTAKE. Jody didn’t notice it at first, either. Why? BECAUSE NOBODY MAKES THAT MISTAKE. Turns out, the main reason I didn’t get the child tax credit was because, according to Liberty Tax, I was childless.
And Liberty has a return review process. That’s why I had to go back (the first time) because the “main guy” – not sure if he’s a CPA or an EA – had to review the return. And he didn’t catch the missing children, either.
Jody Padar is my Nancy Grace: she found my missing children.
That oversight alone would have moved me from owing tax to getting a refund. But there’s more. Jody and I went over my travel expenses and per diem again – the same way I went over them with the lady at Liberty and the same way I went over them with Jody before – and it turns out that Jody’s understanding and treatment were right. That scored me another $3000+ in deductions.
Liberty was going to allow me to deduct my wife’s tuition for realtor school, but Jody confirmed that was not technically the proper treatment.
One error did occur on Jody’s side, however, and she was mortified. On Schedule A Line 5, New Vision had recorded my state income tax withholdings from my W-2, but they did not include the additional $772 of 2012 state taxes I paid in 2013. Clearly, this was a minor oversight compared to two missing exemptions and the bungled travel expenses. Also, like I said earlier, I didn’t provide New Vision with my 2012 Utah State return, so they didn’t even have that information.
Jody was mortified. I thought it was understandable given the nature of what we were doing, when we were doing it, and the fact that I hadn’t provided some necessary information. Oh, yeah, and she changed my tax fortunes by about $3,500.
Now, one thing Liberty Tax does that would make Ron Baker proud is they offer a service guarantee which reads, “We guarantee our services 100%. If you are not satisfied with our service, for any reason, the office will refund your preparation fees.”
I was very excited. I went back to Liberty and asked for a full refund. I was really hoping that they would be dicks about it because it would make a better story. But apparently even Liberty Tax knows how stupid it is to overlook someone’s dependents. In less that 15 minutes, I was done and was promised a full refund in the mail in seven to ten days. (That was eight days ago. Still no check. I’ll let you know if they turn into dicks.)
Liberty did e-file my return, so Jody and I are going to wait until after busy season. She’s going to file an amended return for me, and she’s not even going to charge me for it. Instead, I’m going to dance in front of her building with a New Vision CPAs sign. That way I can show her my Rob Halford costuming.
This whole thing made me think back to a VeraSage presentation I was at. Michelle Golden told a story about a six-dollar haircut place that opened across the street from an established barber. Rather than feeling threatened by the competition, the barber put up a banner that said, “We Fix $6 Haircuts.”
Maybe your firm can be the “We Fix Liberty Tax Returns” place. Or you could just put up a sign that says, “Your Dependents May Go Missing at Liberty Tax.”
Greg was born in Akron, Ohio, in the shadow of the Firestone tire factory. He began to swim competitively when he was eight, swimming for the Mountlake Terrace Lemmings. He graduated in 1995 from the University of Washington with a math degree. He chose math for the ladies. After serving ten-years as an 8th grade math teacher, he decided it was time for a career change, mainly because he “couldn’t stand those little bastards.” He began his accounting career with a local CPA firm in Orem, Utah, where he consistently failed the QuickBooks ProAdvisor advanced certification exam. Greg currently works as the Controller for the Utah Valley Physicians Plaza. He lives in Provo, Utah, with his wife and two kids. He enjoys eating maple bars, drinking Diet Pepsi, and swearing.