Boo! Extension season horror stories

What keeps you up at night? For many tax accountants, it’s the dream of not finishing all of your clients’ tax filing extensions by Oct. 15. Of course, there are solutions for this such as making sure clients abide by your deadlines, but you very well know there is always going to be that last client who let’s you know very late in the season that they aren’t ready to file.

We reached out to several members of the Intuit® Tax Council to tell us their best extension season horror story, so sit back and be prepared to be … amazed!

Nick Boscia, CPA, EA—Boscia & Boscia PC

A new client came to us after our internal Sept. 1 deadline, hoping we could still complete their business and personal tax returns by the Oct. 15 extension deadline. As we reviewed their comparative P&L statement and balance sheet, it became clear that the bookkeeping was riddled with errors, which raised concerns about the accuracy and ability of their bookkeeper. Things quickly spiraled when we realized that both their 2022 business and personal returns needed to be amended due to these bookkeeping mistakes.

The horror didn’t stop there. When we received their LLC formation documents, it became evident that they were required to file a partnership return, not a Schedule C as they had originally submitted. We had to rush order amendments to correct 2022 before we could even start their 2023 returns. Through countless late nights and with the deadline looming, we managed to amend 2022 and complete 2023 just in time. However, when we went to e-file the return on Oct. 14, disaster struck; the return was rejected due to identity theft, and the client was forced to mail in the return by Oct. 15.

Thanks to our quick thinking and perseverance, the client was still able to meet the deadline, though just barely. Despite the unexpected setbacks, we saved the day, and the client now loves our firm. This case was a powerful reminder that extensions delay the paperwork, but not the problems!

Editor’s note: Check out Nick’s accountant spotlight on the Intuit Tax Pro Center.

Louise Cochrane, CPA—L.F. Cochrane & Associates

As w were wrapping up an individual client’s tax return on Oct. 10, an investment of his, a K-1, went under. As I reviewed the K-1, I noticed it showed a beginning capital balance. I said to the client,”Strange, this K-1 has a beginning capital balance. How long have you had this investment?”

My client responded, “A total of three years.”

I responded, “OK, but I have no record of this investment before now. Can you get me those K-1s, please, and we will amend your returns?”

Client said, “Sure.”

I then realized there is another investment that I haven’t received K-1s for, and then realized that our custom tailored organizer spreadsheet we shared with the client has “N/As” entered by the client next to a few more brokerage accounts. I decided to test the client by asking, “Do you have 1099s for these accounts?”

Client said, “Yes, yes I do.”

It goes to say that no matter how many processes and checks I have, some clients are unaware of what they are doing and don’t provide everything that is needed to be in compliance. We are only as good as our clients are willing to collaborate. 2023 is complete and e-filed, and so are the amended 2022 and 2021 returns. The 2022 return owes the client close to $100,000 in refunds. Sigh …. 

M Katie Helle, CPA—Scaled Accounting Solutions

During extension season, a new client came to me after becoming frustrated with their prior accounting firm. They felt unheard, undervalued, and uncertain about the accuracy of their financials.

Once I finally gained access to their books, it became clear that there were major issues with the financial statements. Even at a quick glance, I saw red flags that required deeper investigation. I explained to the client that before any tax returns could be filed, we would need to thoroughly clean up the accounting work.

The effort paid off. By addressing the accounting issues head-on, we were able to save the client a significant amount in taxes and successfully file their return the day before the deadline. What started as a nightmare turned into a huge win for the client—and a reminder of why getting the accounting right matters so much.

Melina Maslehati—Seed Money Consulting

I had a client who not only was in extension status, but didn’t file the prior year’s taxes. The reason for this was that while they were operating for some time—15 years as landscape architect—they finally decided to hire a bookkeeper who found reconciliation issues in the books. One thing led to another, and things came to head when the client’s daughter needed to apply for the FAFSA. This is when we met them.

When I got into the books and started helping clean them up, I found they filed their S Corporation returns wrong for the last five years. They never reported stock basis, which disallowed loss carry through to the personal returns. Long story short, I found about $60,000 in overpayment tax liability over the last three years.

The client went through all the emotions, and came to terms that we are better when we have the right resources in the right places. We can’t be experts at everything. We ended up filing amendments going back two years—thats where most of the write offs were—and filed in time for their daughter to complete her FAFSA..

Tania Santos, EA—Platinum

I have this “newish” client that I was trying to bring in as a monthly engagement—but not anymore!

I kept telling them since February to please submit their P&L and balance sheet so I could get their S Corporation return started and help them with tax planning for 2024. The wife kept telling me that she was almost done with the books and would submit the reports soon.

Soon became March, and so I told her, OK look; if the reports are not ready, let’s just file an extension for both your S Corporation and personal tax. Perfect! That would give her some more time to work on the books.

May came around I kept calling asking for financials, then it was June, July … and very soon, August. I gave her a last chance to submit since I stopped taking clients for S Corporation prep in mid-August. I gave up and said OK, I guess they are just not filing.

On Friday Sept. 13, they submitted their financials, I reviewed them, and the balance sheet is full of (insert bad words here). 

I asked them to come in so I can explain that their financials were a horror, and the wife git extremely upset and said that she will fix it, but I knew that she had no idea what she was doing. I offered a bookkeeping cleaning, but the end of the story is that now they have ghosted me!

Editor’s note: Check out Tania’s accountant spotlight on the Intuit Tax Pro Center.

Ami Shah, CPA, MST, ACA —Ami Shah, CPA

For tax professionals, September 15 is the true heavyweight—even more critical than April 15. It’s the day when most pass-through entities file their returns, pay third-quarter estimated taxes, fund retirement plans, and kick off year-end planning. With so many deadlines converging, it demands precision, speed, and deep coordination. I often refer to it as the king of all tax filing deadlines.

This year’s curveball? What should have been a routine filing for a business client turned into a full-blown crisis. We received late books from the CFO firm, last-minute retirement funding limits from the third-party administrator, and a three-year R&D credit study just days before the deadline. The return had been prepared using maximum plan deductions, but only minimum contributions had been made, leading to overstated deductions, distorted income, and a significant cash crunch. We had to amend the business and personal returns, realign credits, and coordinate multiple moving parts. all while managing cash flow. And yes, we still filed the 2024 return on time.

Every tax season brings its own surprises. Whether it’s last-minute updates, urgent client questions, or missing data, challenges are inevitable. But what matters most is how we respond. It’s not luck that gets it done; it’s Experience + Preparation + Perspective.

Tatiana Tsoir, CPA—Linza Advisors

A client in the coaching industry isn’t happy with their preparer, who was not licensed. They showed me their separate!! tax returns for a husband and wife as single! Then, to add to the horror, the preparer added $200,000 worth of deductions to lower the tax burden, shifted four partnerships to the husband so he could “take all deductions,” and added the husband’s brother as a dependent on his tax return.

Chase Vowell, Flux Accounting

We signed up a new client mid-year who wanted to also switch payroll companies. After doing a ton of work to onboard the client and help their payroll transfer go smoothly, we thought we were off to the start of a fruitful relationship.

Fast forward to August of the following year and we learned through a series of tax notices that the client had formed a duplicate LLC with the same name, registered a new EIN and a new state tax ID. The client told no one and actually mixed the new EIN with the old state tax ID in their payroll filings, so two LLCs, two EINs, and two tax IDs intermingled halfway through the year.

If your brain just broke, then you know exactly how we felt. We realized that we had to come up with a way to 1) file the business return by 9/15 in a way that would not trigger an audit, 2) amend payroll tax filings and move payments between tax IDs while minimizing penalties, and 3) explain to the client that it will cost a decent amount of money to pull all this off by the extension deadline.