Advisors’ Most Asked Questions on Working With Tax Professionals

Every financial decision has a tax impact. This simple truth is particularly meaningful for financial advisors because it means that every recommendation they make to clients has a tax impact. While some financial advisors have certificates or training that includes some level of tax knowledge, the vast majority are not certified public accountants or enrolled agents. They are not themselves tax professionals who can, or want to, prepare tax returns. This leaves most financial advisors searching for ways to effectively collaborate with tax professionals in service of their own clients.

This article covers four of the most common questions advisors ask when it comes to working with tax professionals:

— How do I find a tax professional to collaborate with?

— How do I find a CPA who will think beyond tax prep?

— What should I do when I find an error on a tax return?

— What do I do if my client’s CPA tells them I am wrong?

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How Do I Find a Tax Professional to Collaborate With?

Unfortunately there is not a directory of “CPAs who play nice with financial advisors.” Financial advisors who are successful in collaborating with tax professionals typically find that success by building great relationships, not hunting for unicorns. Tax professionals encounter financial advisors (good and bad) on a regular basis and often see them more as salespeople than professional peers. Building great relationships starts with demonstrating the value you bring to your own clients.

But build a relationship with whom, exactly? Every financial advisor should have a list of tax professionals they are currently building relationships with or would like to build relationships with. Two great ways to create that list are to start with the tax professionals who clients already work with and then look for tax professionals who serve the same niche. Their tax preparer will be listed on their tax return along with their contact information.

For advisors who serve a specific niche, looking for tax professionals with a similar focus is a great next step. And for the advisors who don’t serve a specific niche: Identify one, it can be transformational.

How Do I Find a CPA Who Will Think Beyond Tax Prep?

Unfortunately, there is no directory for this request either. Instead of looking for tax professionals who market themselves as tax planners, advisors can work with the tax professionals they are building relationships with to incorporate tax planning. The first key element of doing this successfully is timing. The traditional “tax season” (February to April) is the wrong time to bring up tax planning. Tax professionals are in their busiest time of year and are focused on the previous year, which means the opportunity for planning for that year has already passed. Instead, financial advisors should be reaching out in the summer and fall months, when planning can be a proactive, collaborative conversation with the tax professional.

This contrast is critical. Too often tax professionals feel as if they are left to clean up messes before a tax deadline created by other financial professionals (including advisors). Reaching out in October or November instead of February or March and offering to pay for an hour of a CPA’s time to discuss a planning opportunity, such as Roth conversions, for a mutual client completely changes the dynamic. Now the CPA feels as if they are part of the team and everyone is working together for the benefit of the client.

What Should I Do When I Find an Error on a Tax Return?

Mistakes happen. They happen to every professional who has ever provided a service, including in the personal finance industry. The question is not “if” errors will happen on tax returns, but “when.” Especially for advisors who are diligently working to build great relationships with tax professionals, navigating how errors get addressed can feel daunting. The ultimate approach employed can certainly impact the end result for the client, which should be the primary goal.

The principle kids learn at an early age, “Treat others how you would want to be treated,” holds true in this situation. Most professionals would want to be given the benefit of the doubt and provided the opportunity to correct a mistake, if in fact that is what happened.

Always start with curiosity. Tax professionals spend all of their time on taxes, so it is possible they know more than the average financial advisor about how taxes should be reported. A great line to use is, “Help me understand.” This intro gives the tax professional a chance to share their approach and potentially explain why the return is in fact correct before anyone feels a need to get defensive.

When there really is an error, the primary goal needs to be getting it fixed and the client taken care of. If there are situations where the client’s current tax preparer seems unwilling or unable to help with that process, advisors who have taken the time to build relationships with a variety of tax professionals will have readily available resources to turn to for insight and possibly even help resolving the issue. It’s important to remember the goal is serving the client, not proving who is right or wrong.

What Do I Do If My Client’s CPA Tells Them I Am Wrong?

Anytime another professional is involved, starting with curiosity is going to pay dividends. The goal of collaborating with tax professionals is not simply to find someone to approve a planning idea; tax reporting is a crucial step in the plan being executed. The first step is to have a conversation with the tax professional, preferably without the client involved. This allows for an environment where a constructive discussion can happen and no one feels the need to prove how smart they are or that their way is best. If this doesn’t resolve the issue, a decision has to be made.

First, is this something that will be financially catastrophic to the client? If not, reinforce to the client the value of what was proposed and why, and then defer to the expertise of the tax professional so that the client is not left having to choose sides. This could sound like: “In talking with your tax preparer, she does not agree with this strategy. I stand by my recommendation, but I will defer to your tax preparer’s expertise in this area.”

If, however, the actions recommended by the tax professional could be financially catastrophic, a different approach is necessary. The following is a script that has been successfully used by financial advisors:

“I’ve spoken with other experts who agree with my assessment. Unfortunately, in speaking with your tax preparer, they continue to disagree. I strongly recommend that you find a new tax preparer, and I have several options for you. I know this puts you in a tough spot, having two trusted professionals giving you opposing advice. However, I must strongly advise you to get a new tax preparer.”

This, of course, is the last resort and typically can be avoided by following the other recommendations in this article.

Taxes will always be a critical element of a client’s financial life. Advisors are left with the decision of whether to proactively provide value in this area or simply wait and hope for the best. The great news is that by building effective relationships with specialists (the same approach can be used with professionals beyond the tax field), an advisor does not themselves need to become the expert in everything.

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Advisors’ Most Asked Questions on Working With Tax Professionals originally appeared on

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