three times it’s appropriate.
by ed mendlowitz
how to review tax returns: the field-tested update
the workflow of returns submitted to reviewers needs to be managed, otherwise the reviewer could become overloaded with incomplete or partially completed returns waiting on additional information. this adds nonproductive work to the reviewer that can best be delegated to the preparer, who is actually delegating it to the reviewer, i.e., upward delegation, which makes no sense, or have it assigned to an administrative person for follow-up. for efficiency i suggest that the preparer is the best person to follow up and maintain control of the incomplete return.
more: 10 errors that ‘smart’ scanners make | three ways to improve tax returns | don’t use eyes, use brain | three types of tax return reviews | tax review procedures are your quality control | seven types of tax return reviews | how to turn tax returns into new business
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the firm mindset must be to maximize the efficiency and effectiveness of the reviewer. (i keep repeating this. this must be a top goal if you want to get the best that the reviewers can offer to you.)
passing on any work to the reviewer that doesn’t make the best use of their training, knowledge and skills makes no sense. when procedures and processes make no sense, it takes away cents … and dollars from the firm.
returns should be submitted to the reviewer as follows:
- when completed by the preparer. “completed” includes all firm schedules, worksheets and properly indexed client data and workpapers.
- when the return is completed except for some identifiable open items. this way the return up to that stage can be reviewed, so when the open items come in they just need to be entered and the reviewer could complete the review. this is an expedient way of handling returns when the preparer will not be available to receive the missing data and enter it. unless the preparer is assigned to an involved and lengthy audit or project out of the office, or you used an outsourced vendor, this is not the best way to handle returns with open items. again, this is upward delegation and while there is a desire to reduce the touches and conserve the preparer’s time, it is not only having work pushed upward from the preparer to the reviewer, but then no one would be reviewing the data entry done by the reviewer. this injects a weakness into the system. the best way is to have the preparer keep the return until completed, or have the reviewer return the return to the preparer after their partial review.
- complicated issues can and should be submitted to the reviewer when they arise and not when the return is completed. hopefully the difficult items would be worked on before tax season gets really hot and heavy and the preparer and reviewer will have time to consider and reflect on the complicated issue.
