Verbiage for Termination of Clients

[dascpa]

Since you're so much of a pain in the ass - may not be the best way to start off my letter to [numerous] clients, I'm curious how you terminate them.

[Greta]

When finishing their tax returns of the season, I pleasantly mention that I plan to be "scaling back" next year (I can say that because I'm old), so as to give him/her plenty of time to find another tax preparer. They sometimes notice (since our town is small) that I'm taking on new clients. There have been a few times when I lost my cool, and say that our relationship is not working well for either of us, and suggest they go elsewhere. The ones who complain about my fee are definite candidates for parting company. That seems to upset me immensely. When I get a call from a prospective client, and the first question is "how much do you charge," the response is that we are not taking new clients.

[rbynaker]

I've been scaling back too so that's been working for me (mostly).

One year (I think it was 2018 when TCJA started) I sent an email to all of my "last minute" clients telling them that I wasn't doing last-minute work any more, if they wanted their returns prepared by me they had to have substantially all of their data in to me by 3/15.  Basically I gave them enough rope to hang themselves.  Then when they contacted me in April I politely gave them the IRS and VA sites for making their own extension payments and told them they would need someone else to file the return.

[sjrcpa]

We're not scaling back but did a purge a couple of years ago of nonprofitable and PITA clients.

We used this:

"Over the years as our firm has grown, our operational costs have increased and accordingly, our bill rates and our fees are increasing.  As part of our annual business plan review, we have conducted an analysis in an effort to focus the future direction of our accounting practice. We have reviewed our clients’ needs to determine how each client fits in with our plans. 

After careful consideration, we don’t feel we can continue to service your needs at an affordable price.  Therefore, we have decided that we will be unable to provide tax preparation services to you as your accountants. This will be effective January 1, 20XX"

I wasn't entirely happy with the wording or the process but it worked. YMMV.

P.S. Your professional liability insurance carrier may have sample disengagement letters, too. I think we used them as well as some from AICPA as templates. The good clients we referred to another firm. The PITAs we did not.