In the past two weeks, we’ve seen an over 6% drop in returns not started and a corresponding over 6% increase in completed returns. In 2019 the filing pace didn’t move the needle during the month of June. Tax season was long past, the next deadline was months away, and staff enjoyed their summer months.
This year firms are hustling to engage and complete client work. As we push these last six days before the deadline, you should be asking, if it isn’t completed or extended, why not? More importantly, if it isn’t started, will it ever start with your firm?
I mentioned in our last update that historically, 20-25% of individual returns are filed within the last two weeks before the deadline. While this statistic seems to be born out in the 2019 numbers, CPA Trendlines recently pointed out that there are 10 million tax returns that should have been filed by now “missing.” XCManalytics is also showing that approximately 80% of 1040 tasks whose returns are flagged as “work not started” haven’t been noted as extended in the system. The persistent filing pace lag, combined with IRS and XCManalytics data, leads me to wonder if professional preparers are losing out to DIYers. With an extended tax season, and most of us stuck at home, more individuals may have chosen not to use a preparer.
Evaluate your untouched inventory of individual tax work. If it’s significant, it’s time to reach out to those clients who have been radio-silent this year.