4 reasons to push ahead with tax question research

when “quick and easy” isn’t.

by ed mendlowitz
tax season opportunity guide

i keep a few of the one-volume tax guides in my office so i could look up a quick answer when i need to. recently a golf buddy emailed me a question that i thought i could answer quickly. he wanted to know that if he was in the “zero” percent capital gains tax bracket, did that apply to an unlimited amount of capital gains? sounds like a simple question.

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well i looked it up online and then in three one-volume tax guides. only one source had thorough coverage of the issue. i ended up spending an hour on this “simple” question including my emailed response. nothing is simple anymore. 

research techniques: needing an answer to a question you don’t know will slow you up and insert a bottleneck in your production line.

there are three types of research – light, heavy and just want to make sure. every preparer should be equipped with a one-volume tax guide (either paper or a digital version) to look up questions.

my rule is simple. if a preparer doesn’t know something they should spend a half hour, but not any more time than that and if they don’t have an answer, they should go to someone above them for assistance. show them what you found or did not find and ask how you should proceed. sometimes they will point them in the right direction, and sometimes it would be something above their level and they will get the answer.

the first person trying to find the answer is what i call light research. heavy research is where the higher level person says they will find the answer. this requires additional work, skills and resources that they are more competent to do or have. many times you know something, but just want to make sure – that is a minute or two project and should be done by anyone feeling that way.

don’t let not having an immediate answer slow up the return.

not having an immediate answer to a question does not mean work should stop. work around it, getting everything else completed so when that response is received, the return can be easily completed.

every return should have an open item listing. the issue needing heavy research should be the only entry on that list. stopping work leaves a larger volume of work undone and it will make it harder for someone else to pick up on the return should the original preparer not be available to complete the return

stopping slows up the momentum.

each client’s return is treated special but the work load requires a method similar to an assembly line, and any slow up reduces the momentum. because of this, it is important to have a minimum number of stoppages. this can be accomplished by as much as possible being done each time there is a “touch” while at the same time reducing the number of touches. as much as possible needs to be done each time the return is worked on with nothing left for later.

when a question needs research, it should be done immediately within the half hour rule expressed above. anything not resolved creates delay and increases the time to complete the return

putting something aside creates a “mortgage” of work that will still need to be done – it won’t go away.

all returns will need to be completed and at some point, there is no tomorrow. a no-tomorrow attitude will reduce delays and time needed to work on a return. anything pushed forward will become a mortgage on that return, increasing the time to get it completed and pushing forward the completion date.