Thursday, October 15, is the extended deadline for most individual returns. If you have clients who still have not delivered documents, you already know the feeling. But here is the contrarian take: the late client is usually not a discipline problem. It is a process problem, and you can fix it.
This week: triage
Sort every open extension into three buckets: ready to file, waiting on one item, and silent. Ready returns go out the door first. Waiting returns get a specific, dated request sent to clients. Silent clients get a phone call, not another email. Emails are how you got here.
Be exact in your ask: "I need the K-1 and the brokerage statement by Monday at noon, or we cannot make Thursday." It may be too late depending on how your engagement letter reads for this year, but also consider hard deadlines of when information needs to be received in order for you to guarantee timely filing. This should generally be weeks ahead of a deadline, not days.
Know the exposure and say it out loud
Remind clients what a miss costs. Under the IRS penalty rules, the failure-to-file penalty is generally 5% of the unpaid tax for each month or part of a month a return is late, up to 25%. The failure-to-pay penalty is generally 0.5% per month. And an extension to file is not an extension to pay, so any balance unpaid since April has been accruing already. Check the IRS’s tax relief in disaster situations page too, because some clients may have later deadlines than October 15.
Then document everything. Send written notice of the deadline and the consequences, and keep it in the file. If a client chooses to miss it, you want that choice on paper.
After the deadline: decide your policy
Every firm has clients who are late every year. Pick one of three responses and apply it consistently:
Charge for it. Put a late-document fee in your engagement letter. Clients value what they pay for, and the fee covers the scramble.
Move them back in line. Documents received after a published cutoff go into a later slot, with the penalty risk explained in writing. You are not punishing anyone. You are protecting the clients who delivered on time.
Part ways. If the same client has cost you the same weekend three years running, the relationship is already priced wrong.
Build the system before January
The next four months are your quiet window. Use them. Publish a document cutoff date, such as early February for individual clients, and put it in every engagement letter. Send organizers early. Use a client portal with a checklist showing exactly what is missing, so nobody can say they did not know. Automate reminders at 30, 14 and 7 days before the cutoff. Price rush work as rush work.
None of this is complicated. It just has to happen before the rush, not during it.
October 15 will come and go. The question is whether next October looks the same. If you fix intake now, the answer can be no.