Tax Season '04 Takes the Cake
'Never worked harder,' says one CPA. 'Smoothest season in 36 years,' says another.

by Rick Telberg
At Large

Tax professionals may have turned in one of the most spectacular seasons on record, if the results at more than 700 firms are to be believed.

Last week, we reported that about 73 percent of tax practitioners were reporting measurable gains in revenue and profit. But the season wasn't over yet. Now, with results from a second wave of participants, it seems that 83 percent of At Large-reading tax practitioners posted revenue gains -- an astounding 18-point advance from last year's 65 percent level.

"I never worked harder in my life!" exclaimed a managing partner at small local firm, reporting gains in all the critical criteria for a successful season.

Some four in five or 81 percent of firms posted gains in net profits for Tax Season 2004, versus 69 percent in 2003.

"Felt like the hardest I've worked in 15 years," said another top partner, who is still trying to sort it all out. "I don't really know why. It was just a [pain] this season, no time off like in prior years, constantly working."

About 73 percent of firms posted gains in new clients, up from 59 percent in 2003.

"I had a 98-percent-plus retention rate for my tax clients," exulted CPA Dan Embody of Bristow, Va. "This in spite of a relocation of my practice in the middle of my busy tax season."

Half of all tax pros reported putting more clients on extension, partly due, no doubt, to increased workloads and late K1s and 1099s. In 2003, only 36 percent of practitioners reported putting more clients on extension.

"One of the smoothest seasons in my 36 years in this profession," said CPA Lewis M. Reyman, of Georgetown, Ind. And customers were happy, too, he added. "The tax cuts resulted in noticeable benefits to many of my clients."

Revenue per client advanced at 78 percent of firms this year, compared with 64 percent last year

New clients, for many CPAs, kept walking in the door. "Our new clients obtained this spring are the most ever in our 30 years!" according to J. Paul who practices in Mississippi.

Profit per client was up at 75 percent of locations, versus 58 percent in 2003.

Business was good for some brand new tax offices, as well. "This was our second year preparing taxes," said Dennis Regulinski, head of Mid-Atlantic Accounting Solutions LLC in Mount Airy, Md., who reported a 757 percent increase in traffic over last year. On the other hand, he paid out a lot in advertising for the business. "So net profit did not reflect the increased revenue. But, hopefully, we will cut back on advertising next year, now that we hooked our repeat business," he said.

Overall, few accountants can remember a busier or more rewarding tax season than 2004. It'll be one for the books.