« Six Tips for Valuation Experts in High Stakes Divorces | Main | Blast from the Past: Lessons Learned from #AdviceAt25 »

Text Me Not: Hidden Perils of Modern Communication for CPAs

Woman on iPhoneTweets. Likes. Posts. Not so long ago, those three words were not only unrelated, they had nothing at all to do with communication. But as communication methods and strategies have advanced, the speed of information has approached infinity. As a result, expectations have grown that responses will be similarly fast and, in many cases, extremely concise. There’s an old saying about the kind of person who is incapable of a simple answer: ask them what time it is, and they’ll tell you how the watch works. Today, tolerance for that trait is at an all-time low.

But while pithy responses can be good for personal communication, they might not always be suitable for business. For CPAs in particular, there can be consequences for choosing an inappropriate means of communication with clients on certain matters. Text messaging in particular is fraught with perils. I recently spoke with Gerard Schreiber Jr., CPA, principal at Schreiber & Schreiber in Metairie, LA, to discuss how communicating with clients has changed over the years, especially with regard to texting.

“I can remember when we started communicating with clients by email, and the various disclaimers that would appear at the bottom,” recalls Schreiber., “The change in Circular 230 in 2005 brought about disclaimers on emails, correspondence… virtually anything a CPA touched.” Schreiber is well versed in the rules for CPAs, having served as co-chair of the AICPA’s Statements on Standards for Tax Services.

Email, of course, can be a long-form format, and allows for lengthy, detailed disclaimers that follow equally detailed information to a client. Not so with text messages.

“Clients communicate with their families by text messaging, and now expect the same when communicating with their CPA.” Schreiber observed.

That’s perfectly fine if they want to ask when you expect to have a form completed or what your golf handicap is. But what if they are asking for advice or guidance?

“No one knows if clients are retaining hard copies of text messages. That could create a liability problem down the road,” said Schreiber. “It’s no longer unusual to receive client communications and inquiries on tax matters by text message—and the client expects an immediate answer. This also happens among tax firm staff members, or between a firm and the accounting staff of a client.”

But think twice about how to answer. If the request is for professional guidance, it might be a better idea to refrain from answering the question directly in text.

“Text messages tend to work best when short, and accounting advice tends to work well when thorough. As such, there is too much room for misunderstanding. The ability and tendency to archive messages is lacking. Also, many texts come from or go to personal phones. In this election season, we had a front-page example of what can happen when confidential email information goes through personal servers. We should use that as an example of what could happen when confidential client information goes through personal phones.”

So where does that leave a modern CPA when clients present business opportunities by text? Here are some guidelines to consider:

  • Treat confidential information by text as a nonstarter. Not only is it insecure on both ends, the risk of inadvertently transmitting information to the wrong party is much too great. The AICPA Code Rule 1.700.001 provides additional guidance on handling confidential information.
  • Avoid dispensing official guidance or advice by text, as it doesn’t come with a disclaimer. Clients who act on your advice without an understanding of its limitations (and the extent of your responsibility) could expose you to liability.
  • Draw up a list of acceptable text subjects and share with any associates. Asking your clients for non-confidential information by text, providing them with information relating to setting meeting times, furnishing estimated dates of completed returns or asking them to call you are good examples of safe text communications.
  • Confirming a course of action or requesting confirmation is probably not a good idea. Most people do not archive their text messages, and this could cause a CPA to scramble for documentation that client approved or requested a course of action.

But what if clients persist in asking?

“One client texted me as I was trying to go to sleep one night, asking about borrowing against funds they had in an account, or using them to invest.” Schreiber recalls. It’s a risky conversation to have by text. “The client had revealed the amount of money they had in the account over an insecure communication channel. I wasn’t about to compound the error by answering over text message.”

That doesn’t mean not answering at all, of course. Be polite, but firm that you are happy to help (it’s up to you whether you want to do so outside of regular business hours), but that it’s too important for the restrictions of text messaging. Most clients will get it after a few reminders and stop asking. If they don’t, a discussion might be in order. Explain your firm’s duty to their privacy and security, and underscore the pitfalls of truncated communications. If you have questions about dispensing written advice in general, see Circular 230, Section 10.37.

Communicating effectively with your clients should take their preferences into effect, and those preferences are definitely changing. However, until methods such as texting catch up with the intricacies of legal considerations and best practices, it’s best to set client expectations to align with your duties to their privacy and security.

Gerald H. Schreiber, CPA.

Adam Junkroski, Lead Manager-Tax Communications, American Institute of CPAs.

Woman on phone image courtesy of Shutterstock


Comments are moderated. Please review our Comment Policy before posting.


Subscribe in a reader

Enter your Email:

CPA Letter Daily