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Renew existing preparer tax identification numbers and register new tax return preparers with the IRS. Any firm member who will prepare all or substantially all of a federal tax return must be registered, regardless of whether or not the member signs the return as the preparer.
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Research state law regarding registration requirements for the firm and tax return preparers. Registration and licensing requirements vary by state, and some states charge registration fees. Renew or register with the states that have registration requirements.
Arrow.svgUpdate the firm’s tax quality control, and policies and procedures manuals. If you do not have a tax quality control manual, consider creating one. AICPA Tax Section members and CNA policyholders have access to the AICPA Tax Practice Quality Control Guide to serve as a resource.
Arrow.svgReview tax return volume from the prior season, anticipated changes for this season, and current staffing. Make adjustments, as needed. Be alert for bottlenecks that may arise, such as too many staff and an insufficient number of reviewers. Explore using data scan software or software that retrieves data from third parties and automatically adds it to tax software.
Arrow.svgDetermine if additional staff will be required and initiate contact with subcontractors who can assist with tax season. Perform due diligence before hiring subcontractors or temporary staff. For guidance, read the article Due Diligence with CPA Firm Subcontractors. Consider applicable AICPA ethics interpretations and Treasury regulations. Reach an agreement regarding such issues as fees, hours, the subcontractor’s obligation to protect confidential information and more.
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Review tax organizers to ensure that they fully address recent, complex areas of law, and reporting requirements, such as:
  • Tax Reform,
  • Wayfair,
  • Filing obligations related to foreign activity, including the FBAR and the Foreign Account Tax Compliance Act (“FATCA”),
  • Virtual currency transactions, and
  • The sharing economy, including income from home rentals, driving services, or other peer-to-peer services. If you are not conversant with the tax implications of the sharing economy, read Short Term Rentals, The Sharing Economy and Tax.
If organizers do not adequately address such issues, consider supplementing them with additional questions or specifically addressing them in documented conversations with clients.
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Evaluate the effect of hosting services on the firm’s independence with respect to attest clients. The AICPA Professional Ethics Executive Committee issued an ethics interpretation, Hosting Services, ET 1.295.143 which became effective July 1, 2019. A firm’s independence may be impaired if it is a “host” of client data. The interpretation defines “hosting” to mean it is the sole source of information necessary for the client’s records to be complete. See the Risk Alert Being a Good Host Can Cause Liability Concern – Impact of Ethics Interpretation, Hosting Services, and the article How Data-Hosting Services Affect Independence for more information.
What to do now … before the big rush
7 steps to prepare the firm for tax season
5 steps to review e-file requirements
and processes
4 ways to update engagement
letter processes
3 must-do’s to review client acceptance
and continuance procedures
8 steps to prepare the firm for tax season
5 ways to help staff prepare for tax season
What to do now … before the big rush
11 items to cover in a pre-tax season staff meeting
15 things to include in a control log
4 things to remember when testing tax software
8 things every tax preparer should do for each client
4 ways to better plan for deadlines
2 keys to survival
What to do during busy tax season
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