Question

You are a CPA. You have just finished one of your client’s taxes and found that he owes $10,000 more in taxes than he expected. You need to inform your client of the bad news. Which outline would be most appropriate in this situation?(1) I. Provide bad news II. State the facts A. Unexpected income B. Change in tax codes III. Apologize IV. Close with goodwill(2) I. Express appreciation for trusting you to handle taxes II. Explain situation A. Unexpected income B. Change in tax codes III. Inform the client he owes an additional $10,000 in taxes IV. Close with a forward-looking statement(3) I. Inform the client he owes an additional $10,000 in taxes II. State the facts A. Unexpected income B. Change in tax codes III. Close with a forward-looking statement

Answer 1

Answer:

(2) I. Express appreciation for trusting you to handle taxes II. Explain situation A. Unexpected income B. Change in tax codes III. Inform the client he owes an additional $10,000 in taxes IV. Close with a forward-looking statement.

Explanation:

This would be the best way to address this situation. In this example, the client is likely to be angry and upset when he realizes about the changes in his taxes. Therefore, you should try to preempt this situation. By expressing appreciation for using you to handle his taxes, you begin in a positive and friendly note. Moreover, you should proceed to explain the situation, inform him of the changes, and end on a kind note.