{"id":108069,"date":"2023-02-01t12:23:22","date_gmt":"2023-02-01t17:23:22","guid":{"rendered":"\/\/www.g005e.com\/?p=108069"},"modified":"2024-08-07t23:09:50","modified_gmt":"2024-08-08t03:09:50","slug":"three-ways-to-improve-tax-returns","status":"publish","type":"post","link":"\/\/www.g005e.com\/2023\/02\/01\/three-ways-to-improve-tax-returns\/","title":{"rendered":"three ways to improve tax returns"},"content":{"rendered":"
<\/a>think \u201cquality control,\u201d not \u201creview.\u201d<\/strong><\/p>\n by ed mendlowitz<\/i> it occurs to me that there is a difference in the quality between the returns someone does for himself or herself and the returns they do for their clients.<\/p>\n more: <\/b>tax follow-up worksheets can mean more revenue<\/a> | tax: the procedural checklists your firm needs<\/a> | don\u2019t use eyes, use brain<\/a> | stop tax return review shortcuts<\/a> | the best way to review a tax return<\/a> | three types of tax return reviews<\/a> | routine is key to reviewing tax returns<\/a> | why you can\u2019t skip checklists<\/a> | tax review procedures are your quality control<\/a> | seven types of tax return reviews<\/a> | how to turn tax returns into new business<\/a> an informal survey by me showed that the percentage of returns with errors of sole practitioners and partners in cpa firms is less than 2 percent, while the percentage of errors by their staff ranges from a low of 25 percent to a high of 95 percent! why the difference? note that preparer errors are measured by the completed returns they submit for review. and sole practitioner and partner errors are measured by whether a notice was sent by a tax agency or an error is discovered when the following year\u2019s return is being prepared. i don\u2019t believe work is done as carefully if it is known that someone will be rechecking everything that was done. when a preparer works on a return, they are fully aware that there will be a complete review of what they do, so the care to get it done right is \u201cslightly\u201d missing. when we as partners or owners prepare our own return, we know that no one will be reviewing what we\u2019ve done so we must<\/strong> be more careful to get it right.<\/p>\n we can replicate the getting-it done-right mindset by having a system that takes away the \u201cslightly\u201d reduced care. and i believe that by not checking the input, e.g., eliminating the ticking and tying, we can create this mindset. this would elevate a doing-it-and-getting-it-right mentality.<\/p>\n following are some ways to use this knowledge to have better returns prepared by staff and being able to use the reviewers more effectively.<\/p>\n comment: this only works if followed completely and the firm leader has the resolve to insist on this and the strength to ignore the whining and complaints about the \u201cextra\u201d work by the people who make the errors. note: i strictly followed this procedure and it would not win me any good fellow awards, but the quality of the returns submitted by the preparers are greatly elevated, making tax season much calmer and everyone happier (but i still wasn\u2019t given any award!). you have to decide what you are trying to accomplish.<\/p>\n i have used all three of these methods and they all result in a better product, less cost and quicker turnaround than a method where the reviewer rechecks everything. another method that i have recently begun advocating is to change the name of the \u201creview department\u201d to \u201cquality control department.\u201d i believe this will decrease the error rate because of qc\u2019s stronger identity with quality. also, everyone knows that the qc people rarely recheck everything.<\/p>\n knowing that no one will check the tax return causes a much more deliberate and thorough self-review. proof of this is the small amount of errors made by people preparing their own tax returns. \u201cerrors on a return\u201d is defined by either a tax agency notice being sent to correct or call attention to an error; finding an error yourself after the return has been filed, such as when you are preparing a subsequent year\u2019s return; or the client calling you to say they found an error. in the office for clients\u2019 returns you can also define an error as one that is caught by the partner as she was about to sign off on the return.<\/p>\n assuming i am correct, then if a system could be initiated to have the preparers in a firm do a better job of reviewing their own work before handing it in, then overall quality will be improved and once again you will be reducing the most dear time during tax season \u2013 that of the reviewers \u2013 oops, that of the qc people.<\/p>\n none of the above involves additional teaching or training in taxes, but it does require a major change in the firm\u2019s and preparer\u2019s mindset. if i might suggest, it requires a change of a permissive culture to one of extremely low tolerance for errors. this change generally starts at the top and works its way down, so the partners need to buy into it before you start and remain in during tax season.<\/p>\n in some instances, i have seen highly improved qc with isolated reviewers working on their own who take the time to insist preparers give them good work. they set the standard and teach it one on one to those who will be passing work to them. usually this change starts with consternation but results in better work all around, happier staff, and a high-quality return for the client. and greater profits!<\/p>\n my challenge to you is to consider your internal procedures and decide if you are satisfied with them. if so, then good for you! however, if you believe a change is in order, why not consider what i said above and try it?<\/p>\n another informal survey by me indicates that there is no increase in the amount of notices sent on a percentage basis by tax agencies for returns done during april 1-15. there is also better turnaround and a higher quality return with fewer preparer errors because the preparers understand that the review won\u2019t be as thorough, so they do a better initial job. in addition, the issues reviews are more focused, which is really the best way to use the reviewers\u2019 brains, experience and training.<\/p>\n
\nhow to review tax returns: the field-tested update<\/i><\/a><\/p>\n
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\nit seems that there are two primary reasons:<\/p>\n\n
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