When I said in the introduction that some return types are showing painfully slow, I was referring to 1040 returns. While there is some positive movement since my last update, it is incremental at best, averaging 3.2%. Completed returns saw the greatest movement, at 4.7%, and returns in progress the least, with a 1.7% increase.
This incredibly slow forward momentum is most likely a combination of the extended filing deadline overlapping with what is usually "summer" hours, and a lack of firm contact with clients.
We can see from the data that, for those clients whose returns fall into the "work not started" category, there is no movement. No documentation of calls or other touchpoints, with no task interaction, it's almost as if they've been forgotten, or pushed to one side.
If you are seeing a similar trend in your firm, make it a point to perform some outreach by phone or email. Start with a general check-in, and offer some insight that may help them in the current climate. Ask yourself how you are engaging your clients. Do they need insight into government programs and legislation such as the CARES act? What about a cashflow discussion? During these discussions, make it clear that waiting until July to deal with their tax return might not be the best strategy. Few clients will want to be hit with the double whammy of last year's tax payments and estimated tax payments.
The other factor that may be affecting the 1040 filing pace is our deviation from the traditional busy season. During a typical tax season, workload compression spikes in late March / early April, as tax staff, for all intents and purposes, live at the office and consume vast quantities of coffee and energy drinks to power through those last returns and extensions.
The carrot at the end of tax season is the relative calm that descends upon the industry during summer months. Usually, by this point in the year, CPA firms have stepped off the throttle, taking May-August to focus on training, conferences and events, and vacations.
However, this is the year of COVID-19. Extended filing deadlines, extensions, the usual fall workload, and modified stay at home orders are combining to reduce or remove the summer break. With a little less than two months before the new federal filing deadline and a great deal of work left to be done, firms may be struggling to maintain momentum while providing their staff with the mental health break that many so desperately need – and it must be done without the usual tools of retreats, travel, and PTO.