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.

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.

Update the firm’s tax quality control, and policies and procedures manuals. If you do not have a tax quality control manual, consider creating one to provide guidance whenever tax services are provided. AICPA Tax Section members may review the AICPA Tax Practice Quality Control Guide. CNA policyholders will soon be able to access the same guide in the Policyholder Resource Center.
Review the firm’s controls over confidential client information. Emphasize that firm policies regarding management and use of client information should not be bypassed due to tax deadlines. Consider updating your policies for new risks. Not sure where to start? Controlling Your Data and IRS Publication 4557, Safeguarding Taxpayer Data: A Guide for Your Business are good resources.

Review the firm’s planned response to a data security incident, including its cyber liability insurance coverage. For tips on how to respond if a data security incident occurs, read A Breach of Client Data: Risks to CPA Firms.

Review tax return volume from the prior season and staffing requirements for the upcoming season. Be alert for bottlenecks that may arise, such as too many staff and an insufficient number of reviewers. Explore using data scan software when planning staffing requirements.

Initiate contact with independent contractors that assisted last tax season, determine their availability, and reach an agreement regarding such issues as hours and fees. Determine if additional temporary staff will be required and initiate a hiring search. Perform due diligence before hiring new independent contractors or temporary staff. For guidance, read the article Due Diligence with CPA Firm Subcontractors. Consider applicable AICPA ethics interpretations and Treasury regulations.

Review tax organizers to ensure that they fully address recent, complex areas of law, and reporting requirements, such as:
    • The Affordable Care Act (“ACA”)  
    • Filing obligations related to foreign activity, including the FBAR and the Foreign Account Tax Compliance Act (“FATCA”)
    • The sharing economy, including income from home rentals, driving services, or other peer-to-peer services. If you are not familiar 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.
8 steps to prepare the firm for tax season
What to do now … before the big rush
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