The Flaw in Do-It-Yourself Kits

do it yourself Today, on the internet, there is a “do-it-yourself” kit for just about everything we used to pay professionals to do. When they work out well, they can save you time and money; when they don’t, the repercussions can follow the unwary “do-it-yourselfer” for many years. The real problem with doing it yourself is that, unless you are a professional, you can’t see the flaws built into the “do it yourself” approach until it is too late to avoid them.

Take do-it-yourself websites for tax preparation, for example. Tax returns are all about deductions. Most tax payers don’t file tax returns to give the government more money. Instead, they file tax returns in order to get money back that the Internal Revenue Service has already taken out of their pay checks, unless they are among the rapidly growing 1099 contractor population, in which case they often owe the IRS a chunk of change.

The problem that the 1099 contractors don’t see coming is that a significant percentage of the people who think they are 1099 contractors really aren’t, because they don’t meet all of the criteria that must be met to be an independent contractor. Now, admittedly, the 1099 contractor isn’t liable for the employer’s decision to pretend that they are legitimate 1099 contractors, and won’t face any fines for that mistake. That mistake comes back to haunt the employers….except for the small matter of the quarterly estimated tax payments that a significant percentage of 1099 contractors don’t make, until the IRS comes calling.

The same issues apply to the do-it-yourself divorce. The mistakes that are going to get you in trouble are the ones you don’t know about until you have already made them. In the era of no-fault divorces, many people have simply lulled themselves into the false belief that they qualify for a no-fault divorce for which they may qualify but wouldn’t commit to if they knew in advance what was going to happen next.

If you have minor children, it is really quite impossible to get a no fault divorce because there are child custody, support and visitation rights that have to be negotiated….and no “do-it-yourself” divorce package can do that for you. If you and your estranged spouse are business partners, that adds another level of financial complexity to the divorce action that will require the involvement of both attorneys and accountants to unravel….but very few certified public accountants want to work with someone who is attempting a do-it-yourself divorce because the accountant wants to speak to another professional about the case, and would much prefer to discuss the matter with a competent divorce attorney rather than an interested party.

Oddly enough, Google reports 72 million hits for “do it yourself divorce,” against just 20 million hits for “do it yourself tax returns,” but only 11.4 million hits for “do it yourself bankruptcy.”

Trust is a major issue when it comes to selecting an attorney or an accountant….but there is more than simple trust involved. Attorneys and accountants put their license to practice at stake when they advise you on a legal or financial matter. Do it yourself kit purveyors accept no responsibility for the negative consequences that might accrue from your use of their services.

Do-it- yourself tax preparation packages say that they will back you up if you are called in for an audit, and some actually do show up. The problem is that their liability is limited to the accuracy of the information you provided. When you are dealing with a real live accountant, instead of a computer program, the accountant can ask you, in so many words, if you really want to take a deduction for a business trip to Orlando where you met with no clients, participated in no seminars or workshops, but did manage to visit all of the Disney Kingdoms and all of the attractions at Universal. In other words, a computer program cannot second guess you the way a human accountant can.

It is the same thing with divorce cases. If you think that you can get away with hiding assets and crying poverty, a human attorney can look you in the eye and say, “This is not going to fly, Jack,” while the “divorce in a box” kit, once again, follows the GIGO rule: garbage in, garbage out.

That is the point when it comes to hiring a professional; when you hire an attorney to represent you, you get the insight and intuitions that attorney has honed through years of practice; the preparation and submission of the documents themselves is the smallest part of the cost of hiring an attorney.

Here is a fable that puts this concept of intelligence into perspective. (There are hundreds of versions of this story. Start your own collection if you do not believe me.)

One day, in the middle of a freezing winter, the new owners of a classic, landmark building discovered a problem: The furnaces were hot, the boilers were boiling, but no heat was getting to the apartments on the upper floors of the famous building.

The building’s new owners called the old man who used to run the building for the previous owners. He came back to the city from his retirement home in Florida, and walked into the building wearing a three piece suit. The building owners were mystified, but they followed him down to the basement, and watched him as he walked around the old-fashioned heating system, feeling the pipes and listening closely to the sounds around him. Finally, he took out a small silver hammer, tapped one particular valve three times, then quickly tapped a second value twice, and a third valve just once. In a matter of seconds, the steam started to rising through the building to warm the frozen tenants.

Two weeks late the building owners got a bill from the building engineer for $10,000. They wrote back quite angrily: “Do you really want us to pay you $10,000 for tapping a few values? Please itemize your invoice.”

Three days later, they got a reply from the building engineer: “For tapping with the hammer, $50. For knowing where to tap, $9,950.”

There is a reason for the saying that an attorney who represents himself has a fool for a client. The reason is that a good attorney not only needs to know who, when, where, how and why to tap the broken valve. He also has to have the disinterested emotional distance to actually go ahead and do the tapping without hitting the value too hard, or not hard enough.

And that is  the flaw in Do-It-Yourself Kits.

Blogged by Alan M. Milner
I’m on Twitter @alanmilner

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