The Tax Organizer Fallacy

This is the time of the year when tax preparers sent their clients “Tax Organizers” with a note saying this is necessary to properly prepare your tax return. The Tax Organizer presumably makes the tax preparation process go more smoothly and minimizes omissions. The organizer is a multi-page document that can take hours to complete. I would ague that the time it takes to fill in the organizer and for the accountant to read and transcribe is longer than the time required to prepare the tax return.

My fellow preparers won’t like me saying so, but tax organizers are a waste of your time and, IMO, speak poorly of the quality of the relationship with your preparer. But before I get too negative, let’s say that it is not all bad. Tax organizers help as memory joggers and help prevent legal disputes between you and your tax preparer.

There is a good argument to be made for tax organizers and their contribution to the completeness process. This is the same logic you dentist uses when they hand you a multi-page health history questionnaire. Somewhere in the middle of listing details of that incident when you got stitches on your lip as the result of a second grade playground rough-housing it dawns on us that this exercise is a waste of time.  The completeness argument benefits the service provider far more than the patient/client. Wouldn’t it be better to focus your communication on things that really matter? And isn’t the information we are seeking more than the names and numbers on the Tax Organizer? What about questions, your preferences, biases, worries and goals? Aren’t they as important as the cold data on the Tax Organizer?

A much better way to handle data collection it is by personal interview; old-fashioned conversation. I prefer to start with a copy of the prior year’s tax return and have a real, person to person conversation about what’s gone on in your life since last year.

Slow, inefficient, old-fashioned? Absolutely. (Even though we’ve modernized the process using video conference whenever possible). But conversation remains as the best way that humans have invented to connect in a meaningful way for the purpose of exchanging information. Conversations build relationships, and that’s what you really want to to ensure high quality professional service over the long term.

By the way, the first conversation should be for planning purposes only and should occur long before tax season and there is never a charge or obligation.

To discuss any aspect of your tax situation, just schedule a call at your convenience.



Leave a Reply

Your email address will not be published. Required fields are marked *