what to do during tax season
tasks that should be performed for each client
Consistency is the name of the game with client files. Consider taking these steps early, before things become too hectic.
Assign clients/tax returns to preparers and reviewers
based upon their experience and training.
Review the prior year workpaper file and permanent file.
Set up the current year file, update client profiles, and check data
transferred from last year's files.
Organize workpaper files. Include an index, checklists, and applicable notes from last year's files, including, but not limited to, historical basis calculations, net operating loss, credits, and other carryover information.
Check tax form instructions for changes
in tax laws or regulations, changes to tax forms, and additional forms to file.
Check descriptions, formats, and formulas in document templates
created from support schedules for the prior year and update them for necessary changes. Notably, professional liability claims may arise from mathematical errors due to incorrectly updated spreadsheets.
Identify clients that have undergone significant change. ”Change” may include those clients significantly affected by COVID-19 and related relief legislation, and other tax law changes implemented or expiring in 2021. If not previously done, schedule a meeting with the client to discuss the impact of the changes to 2021 returns (e.g., new syndicated conservation easement investments, micro-captive insurance companies, “COVID homes,” PPP loan forgiveness, ERC, changed filing status, preparation of returns declaring foreign or out-of-state income).
Review client data promptly upon receipt
making inquiries if information appears to be incorrect, incomplete, or inconsistent, and document discussions with clients. Awkward situations may arise when information that the CPA has had for months is reviewed near the deadline, and either required information is missing or additional information is requested.
Use IRS e-services to verify estimated tax payments made by clients in past and current years. Submit transcript requests via the IRS e-Services Transcript Delivery System. Remember that the IRS no longer faxes tax transcripts. Many states provide firms with a similar ability to verify state payments. The new IRS Tax Pro Account may be more helpful for certain tasks, such as verifying receipt of EIPs or Advanced Child Tax Credit payments.