When communicating tax changes there are many avenues that you could choose from such as
telephone call, informal discussion via email, letter (familiar with tax law), letter (less familiar with
tax law), letter (untrained in tax law), publication in newspaper or magazine, publication
(professional journals for tax generalist), publication (professional journals for tax specialist), direct
discussion (tax department meeting), speech to public audience, speech at a conference for tax
professionals, memorandum to be read in the future, appearance on the news, appearance with
less serious tone, post on a general business or tax-oriented blog (Sawyers, 2021). This all depends
on the audience you are trying to reach. For my purpose a CPA’s communication to their client
would narrow this list down. Depending on the amount of change and importance of the change
but, also when the change will go into effect. The challenge is how to deliver the message, so it is
completely understood (Sawyers, 2021). The main ingredient necessary to become an effective tax-
content communicator are the desire to learn and improve as a communicator in general (Sawyers,
2021). There are sites available for CPAs to help with communication to their clients like Corvee.
Looking at certain situation like when in 2023 the earned income credit will increase for qualifying
taxpayers with three or more children this could be sent out in letter form as this will not take
place until the following tax year (IRS, 2023). Now in 2023 the exclusion for gifts which limits how
much a taxpayer can give an individual without paying tax. If you have a client that is gifting their
investments to help with this luxury tax you would need to set a meeting early in the year to
inform them of this change (IRS, 2023). Just depending on the situation and how urgent the
message is will dictate how you give this information out. If the tax deadline has changed due to
extensions, there would be no reason to let your client know this information if they had already
filled their return.
There are multiple ways to communicate with clients to update them on any tax changes. At our
firm there are two ways we normally go about reaching out:
Website - For any firm that does business, they should have a website that all clients can go to
seek information regarding your business. Your website is also the best way to post any important
tax changes for all clients to view at any time. At our firm, we post something new once a month
to keep people updated and can contact us if they have any questions.
Email - Another possible way to reach all your clients at once is through mass email. This can
either be done directly through your companies email or use a third-party service to reach them.
We generally send out mass emails quarterly to update on tax laws and due dates such as
quarterly estimates. We all send out yearend tax updates regarding 1099's and specific to New
York State, IT-204-LLC forms.
One example of a tax change that we would update our clients on are the The Employee Retention
Credit for our business clients. While originally looked as big relief during the covid-19 pandemic,
there have been multiple revisions that have made the credit more restricted and more specific on
who should have been claiming it.
An example of a tax law or change that we would not send out mass communication for is any tax
disaster relief that is sent out. Since we are based in New York City, our clients normally are not
affected by the disaster areas that would receive such relief. If there is chance that someone we
know would be affected, we would reach out personally to that specific client.
Since the tax code is constantly changing, it is crucial for tax preparers to inform their clients of
any recent changes that would directly affect their business. To ensure they are adhering to the
correct regulations that apply to them, clients will want to be kept informed of any changes to the
tax code. There are many ways tax preparers can convey these changes to the client and certain
circumstances require different forms of communication than others to operate effectively. b
Indirect communication platforms such as websites, or social media are an effective way for firms
to communicate broad changes that affect all businesses. An example of a change that would be
good for this type of communication would be the updated tax rates for individuals, it is a rule that
applies to everyone, but not all clients care to know.
A more direct form of communication would be to send out emails to all clients that are directly
affected by a certain tax update. A fitting example of this would be when firms send out
automated reminders for estimated tax payments to each client with the quarterly amounts due.
This is a more personal form of communication and would only be applicable to those who have
quarterly estimates. Another example of using email would be to send important state tax updates
to only the clients who file in those states.
An example of a tax change for 2023 would be the increased 401(k) contribution limits. Currently
the limit is $20,500, however, in 2023 the limit will increase to $22,500. This tax change should be
communicated through websites, social media, or even a mass email to all individuals. It would
also be smart to include other relevant changes for individual filers within the communication to
create less of a paper trail, so clients do not feel bogged down by endless tax update
communications.
References:
New 401(k) contribution limits for 2023 - U.S. News. (n.d.-b).
https://money.usnews.com/money/retirement/401ks/articles/new-401-k-contribution-limits
Alarie, B. (2021, August 24). How to Step Up Client Communications Ahead of New Tax Changes.
The Daily CPA. https://thedailycpa.com/how-to-step-up-client-communications-ahead-of-new-tax-
changes/
IRS. (2023). Retrieved from IRS.gov: https://www.irs.gov/businesses/cost-segregation-atg-chapter-6-
4-relevant-court-cases
Sawyers, R. G. (2021). Federal Tax Research. Retrieved from McGraw Hill.com:
https://mbsdirect.vitalsource.com/reader/books/9780357366448/pageid/1
