Quality Review of Tax Return

Transcription

1 Quality Review of Tax Return Form C Part VIII Pub 4012 Page K-28 IRS Pub 5101 Duck Book page 109 Quality Review IRS site reviews consistently observe that quality review process has been a significant weak area. Deficiencies include: Failure to refer to Intake Sheet (Form C) Little or no engagement with taxpayer Checking only to see if data are properly entered but not evaluating overall return Failure to inform the taxpayer that return is their responsibility 2 1

2 Requirements ALLreturns must receive Quality Review by 2nd certified preparer Quality Review must be completed with taxpayer(s) present The Quality Review takes place after return is prepared, but before taxpayer signs return 3 Quality Review Methods Designated Review preferred method Designated Quality Reviewer Dedicated to reviewing completed returns Peer Review volunteers exchange returns with each other Self-Review never acceptable 4 2

3 Who Conducts The Quality Review? SecondCertified Tax Counselor must Quality Review EVERY return QR on computer rather than printed return Incomplete/missing forms are apparent Ease of updating errors Saves paper and ink/toner 5 Quality Review Process The process must include these elements: All issues on tax return are within Tax- Aide scope and within certification level and training of both volunteers Verification that all required entries on Form C were completed 6 3

4 Intake/Interview Sheet Explain Quality Review Process to taxpayer Review Intake Sheet with taxpayer Review any issues that came up during preparation Highlight any carryovers (e.g. capital loss) Respond to any questions 7 Intake/Interview and QR Sheet Confirm In-scope Confirm Confirm 8 4

5 Quality Review Process Look for typos, transposed digits, missing information, misspellings, etc. Compare Intake/Interview Sheet and supporting documents to return Ask taxpayer probing questions Ask: Is there any other income? 9 Quality Review Techniques Techniques include: Retracing preparer s steps Reviewing 1040 view and linking to input screens Reviewing forms in print review QR may use one or a combination of these depending on nature of return 10 5

6 Quality Review Techniques 3rd page of the print PDF shows basic info. Verify the info for: ALL names ALL birthdays ALL SSNs ALL relationships ALL months Address and Phone Filing status (MFJ = 2, etc) Direct Deposit or Mailed 11 Quality Review Techniques Compare 2017 return to 2016 paper return if available Verify differences are reasonable and taxpayer understands reasons for any significant changes 12 6

7 QR Personal Information Review all personal information in Parts I and II to ensure Filing Status and dependency determinations are correct Verify data for each dependent is correct including answering the questions 13 QR Income Review all income reported in Part III to ensure: All tax documents were accounted for and entered Income is consistent with prior year return, if available Ensure all income was reported, especially self-employment and all cash income 14 7

8 QR Expenses/Deductions Review all expenses reported in Part IV Only qualifying expenses were entered on return All available adjustments to income were included Appropriate deduction (standard or itemized) was used to compute taxable income All available credits were applied to reduce total tax 15 QR Life Events Review life events in Part V All events affecting return were confirmed and correctly entered This area is often least understood by taxpayers and overlooked by Counselors It the area that contains some of the less seldom seen items and items that are outof-scope 16 8

9 QR ACA Review taxpayer s responses to ACA questions in Part VI Minimum Essential Coverage for each month of the year was properly reflected for each person Any appropriate exemptions were identified and recorded on Form 8965 Any Shared Responsibility Payments are accurate and appropriate 17 QR ACA (Con t) Review taxpayer s responses to ACA questions in Part VI Form 1095-A is present for marketplace coverage Data from any Forms 1095-A were properly entered Premium Tax Credits were correctly reconciled, if applicable, on Form 8962 ACA requires a comprehensive and in-depth interview 18 9

10 QR EIC Ensuring taxpayer receives correct amount of EIC requires reviewing several elements of return 19 QR EIC (Con t) Careful review and interview with taxpayer key Has the EIC Checklist been properly completed? Is Filing Status correct? Are birthdates correct? Have all questions in personal information been properly answered to ensure dependents qualified? Were disability pensions entered as wages? Was self-employment income accurately entered? 20 10

11 QR Refund/Payment Options Review Part VII to confirm taxpayer s preferences for receiving refund or making payment for balance due Validate bank account information was entered correctly on return 21 QR Prior Year Comparison (Available starting with TY2017) If returning taxpayer, review the Prior Year Comparison under Helpful tools Verify differences are reasonable and taxpayer understands reasons for any significant changes 22 11

12 QR Completion Complete Quality Review Reviewing tax return notes Verifying that questions have been answered in e-file section of return Updating Intake Sheet with notes Updating the questions section in TaxSlayer pertaining to QR 23 QR Completion (con t) Complete Quality Review Answering any taxpayer questions Advising taxpayers of their responsibility for the accuracy of information on the tax return 24 12

13 Feedback to Preparer Any discrepancies or errors noted should be discussed with tax preparer as appropriate This is best done privately after taxpayer has left 25 QR Gold Standard Available on One Support 26 13

14 QR Gold Standard (con t) 27 Bottom Line Quality review is not just a proofreading exercise Purpose of quality review is to ensure that we file an accurate return for taxpayer which provides the highest refund (or lowest amount due) to which they are entitled 28 14

15 Common Errors Improper SSN Incorrect name Errors in entry: W-2, 1099R, EIN name Improper entry of 1099 information Improper use of 1099-R Simplified Method Entry of 1099-OID as tax exempt Improper calculation of EIC Transposed characters/numbers Return prepared with out-of-scope issues 29 A good quality review takes time. Do not short-change the taxpayer by rushing through it

16 Quality Review Questions? Comments 31 16