having everyone follow the same procedures makes busy season less stressful.
by jassen bowman
tax resolution systems
there is a challenge associated with creating a one-size-fits-all work flow model for a tax office: not everybody operates the same.
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in general, we have identified four basic tax season operational models that appear to be common:
- walk-in service with return prepared right then and there
- by appointment only, with the return often delivered at a second appointment
- drop-off service
- mobile service, in which you go to them
regardless of the actual business model used for delivering actual tax preparation service, one thing remains consistent: the process of actually completing the tax return. there is always some form of client intake, data entry, review, delivery and receipt of payment.
the work flow described here will be presented from the standpoint of an appointment-based service, as this requires the most extensive set of checklists. if you operate a drop-off or mobile service, you will be able to remove a substantial number of steps.
lastly, please note that this does not cover how to prepare a tax return. i am writing this under the assumption that you’ve already got that part under control.
general tax season tax prep work flow
- intake
- new client
- return client
- return preparation
- manual data entry
- automated data entry
- return review
- return delivery
- signatures
- get paid
- e-file processing
- acknowledgements
- rejects
client intake checklist
this is the checklist of things you want to have happen before a client meets with a preparer. a big part of this process has to do with the difficulty level of the return and whether this is a new or returning client.
- smile and maintain eye contact with clients.
- sign in client on paper or crm.
- provide client information sheet for them to complete prior to meeting with preparer.
- if new client brought in previous year return, quickly look through return to look at schedules included to determine return difficulty and make sure client is matched with appropriate preparer.
- if using paper files, pull client file for preparer.
- obtain and photocopy proper identification from client.
- start new file for new clients.
- examine paperwork brought in by client to ensure they have everything needed to complete return.
- verify preparer availability.
- invite client to wait for preparer.
return preparation checklist
for some readers, this will be the single most important checklist. just as a reminder: the point of this particular checklist will not be to show you how to prepare a return – it is expected that you’ve got a lock on that.
- greet client and review client information sheet.
- for self-employed individuals, check that income and expense information is complete.
- if return requires bookkeeping, inform client of this process.
- verify client/dependent ids. in order to file electronically, must have one of:
- original social security cards or itin letters
- return filed in a previous year wherein id was verified
- irs notice including ssn and matching name/address to return
- genuine photocopies of above documents
- review and organize all client income documents.
- verify/enter client information in crm.
- if prior year client, pull prior year return data into current year.
- complete data entry and interview process.
- double-check dates of birth and ssn with client.
- inquire about source income from other states.
- complete any necessary due diligence requirements/worksheets.
return review checklist
this is a great task for the hermit in your office who is ok sitting in a closet staring at a computer screen. if you have a dedicated return review person, they need to be extremely detail-oriented. it is suggested that you establish a specific set of criteria within your office regarding the timeline for reviewing returns, transmitting the electronic filings, etc.
- 8867 completed?
- eic worksheet complete?
- verify ssn against cards/letters
- verify dob
- check spelling of all names
- dummy-check the software-assigned values against client records:
- does filing status match the client’s situation?
- are all dependents accounted for?
- do all software-determined eligibilities (ctc, eitc, etc.) match against actual ages and other factors?
- verify address against source documents and letters.
- verify direct deposit account number and routing number.
- verify w-2 and 1099 entries.
- hand-add sum of w-2 wages and compare to line 7, 1040.
- review any overrides in tax software.
- clear tax software errors and warnings.
- have coupons been credited against invoice?
e-file processing
transmit returns at least twice daily, at noon and at the end of the day.
pull e-file status updates every morning at office opening.
tin mismatch is the most common reason for e-file rejection. during tax return preparation, make every effort to verify tax id numbers.
- if client is claiming a new baby as a dependent, be sure that client has physical social security card for child – do not play guessing games with infant tin.
- sometimes, spouses fail to notify the social security administration of a name change. inquire with client as to this if a return is rejected because of spouse ssn mismatch.
- individuals with two middle names, particularly long last names, or hyphenated names may have this information incorrectly entered in ssa computer systems used for matching. in such cases, check social security cards for how the name is entered. ssa always lists the last name in their system on the second line of the social security card.
in the event of irs e-file rejection:
- if the rejection was caused by an error on our part, fix the return and resubmit.
- offer the client a partial refund for the delay.
- issue refunds via merchant account for credit payments, or via check for cash or check payments.
- if the rejection was caused by inaccurate information from the client:
- obtain the updated information.
- if unable to reach the client by phone, mail a letter to the client regarding the matter.
- do not issue any refunds to the client.
if we make an error on a tax return:
- fix the mistake before e-filing, if possible.
- if return has already been accepted, file a 1040-x at no charge to the client, plus offer the client free tax return preparation for the following year.
- notate the free return in crm system or client file.
- if the client insists on a refund for this year because of the mistake, do so.
- issue refunds via merchant account for credit payments, or via check for cash or check payments.
each week, office managers should double-check client appointment records against e-file logs in order to verify that all client returns were properly transmitted. appointments without transmissions should be in either pending or pickup status.
tax preparers and front office assistants should never issue client refunds from petty cash.