18 November 2015
Individual income tax return preparation is big business. The nation's largest retail tax preparation chain, H&R Block, reported $2.9 billion in revenues last year from income tax preparation. Block has over 11,000 offices worldwide. The other well-known names in this region, Liberty Tax and Jackson-Hewett, also reported strong revenues with nearly 10,000 offices between the two. My question is where are they now?
By now I mean in November as I am writing this. The H&R Block office closest to my house has been dark since April 16. The Jackson Hewitt office a little further up the road is also dark. I haven't seen anyone dressed as the Statue of Liberty waving at the side of the road in quite some time, either.
That office space isn't available on the rental market. The tax prep companies (or their franchisees) continue to hold onto their leases. Those offices are dark now, but they are waiting until next tax season to light the lights, open the doors, and invite us all to get our billions back.
How, do you suppose, these huge tax mills can afford to leave so many offices empty and unused for 8+ months out of the year? Could it be they actually make enough money during the 3-and-a-half months of tax season to pay their rent and utilities for the entire year?
That is exactly how they do it.
The largest tax preparation companies all have a similar business model: establish the brand, establish highly accessible offices, hire (and train) a ton of temporary help, and then charge enough to be able to sustain it all with just a few months of business each year. Given their recent revenue numbers it is a model that seems to be working. People are drawn to the stability a large company offers.
But...where are they now? If the IRS contacts you with questions about your tax return, where do you turn for help? How do you find your tax return preparer - the person that worked on your return. Fact is, if one of the big boys prepared it, you probably won't be able to find your preparer. Odds are pretty good they aren't currently on the payroll.
To be fair, you can get assistance from the big companies in the off season. They typically leave an office or two open in every region and keep a handful of tax preparers on payroll year round. The available office might not be in a convenient location for you, and it probably won't be the person who prepared your tax return, but you can get some help.
I am also a financial planner, so PIM Tax Services is open year round. If there's an issue to discuss with your taxes in November (or any other month) I am available to answer it and, if necessary, work on it. I don't need to earn enough in 3 months to last me all year long. I don't buy air time on network television so that my bow-tied spokesman can tell you how to get your tax refund. Nor do I have a board of directors and stock shareholders anxious to get their next dividend payment . All of this enables me to keep my prices low and provide top quality service to every single customer.
The big boys in the tax business want to prepare your tax return next year. I want to be your trusted adviser for life. We are wasting our time if we don't plan on working together 10 years from now. If you want to build a relationship with a tax preparer you can trust to be there for you, contact me.