My Season at the Tax Mill

Someone recently asked in the forums about using one of the nationwide tax preparation chains. Disparaging remarks about that chain from some of our resident tax experts followed. I had worked for that chain for a season, so I thought I would give a detailed account of it for anyone who is interested. I will leave their name out of it, but their logo has a big green square on it, so I will refer to them as ‘Square’. 

I was a relative latecomer to the world of tax planning and financial advice. It’s my second career. After 24 years in the Navy I followed the standard path and sold my decades of experience back to the government as a civil servant. A few years of that and I was ready for another change. I decided to become a financial planner. I guess I finally figured out what I wanted to be when I grew up. :)

I wanted to get smarter about taxes. A Google search led me to the Square website where they were advertising free tax classes. I signed up for the 8-week course. It was to meet 3 days a week for 3 hours each session. I figured I’d doze my way through it to some type of certificate, maybe picking up some useful knowledge on the way. Turns out I was very wrong about how that would go!

My first clue should have been when there were 26 students for the first class, but only 24 seats in the classroom. “How is this going to work?” I asked the instructor. She just smiled and said, “Some people will have to double up.”

It turns out doubling up wasn’t necessary. Of the 26 of us, 9 completed the course. It was rigorous. I didn’t find it terribly difficult, but very time-consuming. We were in class 9 hours per week. I easily spent another 9 hours per week completing the homework assignments. It was more challenging than any undergraduate course I ever took. When it was over I could have easily passed the first part of the Special Enrollment Examination to become an Enrolled Agent. We learned a lot of stuff. I frequently hear (or read) a criticism of Square being the people there are poorly trained. That was definitely not my experience. I thought the training was quite good.

Well - shocker - the 8-week course is essentially an 8-week job interview. If you successfully complete it they will offer you a job. They offered me one. I was still making 6-figures at my government job, plus my Navy pension. So, of course I took a second job at Square for $8.25 an hour! I really enjoyed that tax class, and I wanted to keep learning. Preparing a bunch of tax returns seemed like a good way to do it.

I got my second choice on store location. I met the store manager and explained this was a second job for me and there were restrictions on the hours I could work. She put me on the closing shift with one other preparer. The other person was returning to Square after a 5-year hiatus, so she was the experienced one. The manager told me to pay attention to her and learn. Then the manager went home and left us alone to handle anything and everything that came in.

The theory that the other preparer was in charge lasted about 5 minutes. Any tax knowledge she may have once possessed had gone through several half-lives of decay, and she had virtually no leadership ability. She personified the train wreck you read about when tax professionals criticize Square. She was very pleasant, but she was a liability. Customers complained to the manager. For the entire tax season Train Wreck only handled the clients I could not get to on the weekday 4-9 shift.

Weekends were different. Weekends I had the opportunity to work with some actual experienced tax professionals. I learned a lot from two in particular. One was an enrolled agent and the other probably could have been, but he didn’t really care about pursuing the credential. He was a retired engineer who just liked doing taxes for a little extra spending money he could take on his fishing trips out west later in the year. They were both highly knowledgeable and having access to them really helped advance my knowledge.

There’s no teacher like experience, though, so I worked 6 days a week, doing all the returns I could. I did 8 or 10 returns for clients with rental properties. Square tries to steer those returns toward preparers with more experience, but when a client came into that store between 4-9 on a weeknight, there were two of us to choose from - and I was the better of the two. Preparing Schedule E had been part of the training, and I was diligent about looking stuff up as well. I did my best to do a good job, and I think I succeeded. (Doing those rental property returns really enlightened me on the possibilities of tax strategies with real estate investing, too. I wanted to learn even more about it!)

Square had developed some add-on products for tax preparation. Extra insurance, speedier refunds, more convenience, etc. I analyzed each product early on and determined they were of minimal value to the client. One was so bad I silently determined to never sell one. Square really pushed us to sell these. The tax preparers in higher pay grades than me (second year and beyond) received a commission for each sale. (First years got a warm handshake for their sales!) We would have team meetings to discuss selling strategies for these add-on products. My manager would sometimes sit in the cubicle next to mine so she could hear me with a client. Afterwards her feedback would always include, “You need to offer the add-on products.”

“Oh yeah,” I would say. “I always forget!”

Despite preparing the second-most number of returns in my store that season (the most of any first-year in my district), I had the lowest add-on sales. Rock bottom. Even Train Wreck had more add-on sales. I remain terribly proud of my pathetic add-on sales, although I did end up selling one of the product I silently vowed to never sell. I prepared the return for a young man who confidently asserted he wanted to buy all four of our add-on products. I tried to talk him out of it, but he would not be dissuaded. The customer might not always be right, but at some point you have to get out of the way and let them spend their money.

Square’s model is to prepare tax returns while the client waits. I hated that. The clients sit there bored, surfing on their phones while I would rush to get through the tax preparation process. Rushing - probably not how you want to describe the way in which your tax preparer works. That was common, though. I am confident rushing leads to the majority of errors on Square-prepared tax returns.

I also didn’t like the fact the pricing model was invisible to me. Square is currently advertising “upfront, transparent pricing.” I’m glad if that’s true, because when I was there I could not tell a client their fee before getting to work. Not because I wasn’t allowed to tell them, but because I didn’t know! The fees were controlled by the corporate office (in another state), and they changed frequently - sometimes daily. I would literally not know the fee for the return until I was done and a screen would open showing the price for the service. Sometimes even I was shocked. A few times I couldn’t even hide my shock. Some of those fees were just ridiculous.

Here are my key takeaways from my season at the tax mill:

1. The training was very good
2. My time with the more experienced preparers was valuable
3. There were a couple of frighteningly unknowledgeable preparers
4. The process of preparing while the client waits makes errors more likely
5. You might get a first-year person preparing your return
6. They will try to upsell you additional products
7. They claim to have fixed their pricing transparency this year, but back then it was awful
8. It was frequently more expensive than warranted

That’s about it. One season was enough for me. I am glad i did it, but even more glad I moved on and eventually opened my own firm. I still love preparing taxes and I am still intrigued by the tax strategies surrounding real estate investing. That started for me at Square, so I have a bit of a soft spot in my heart for them - even though I would never work there again!