how to review tax returns: the field-tested update

why every tax pro needs this handbook

reviewers are not born complete and ready to go, they must be developed.

part of the problem has been that there has been no information or training specifically for reviewers, until now.

learn how to speed workflows, eliminate bottlenecks, find and train the best person for the job, distinguish between content and issues reviews, and identify specific trouble spots.

produce better returns, smarter staffers, happier clients, and more profit.

“reviewing tax returns is a key part of tax preparation. it also is an area vulnerable to major bottlenecks and backlogs. inevitably, firms have more preparers than reviewers. the latter are highly skilled professionals who are more difficult to train or find. therefore, you must consider ways to reduce review time, even at the expense of adding preparer time.”

– ed mendlowitz, author

“in this book ed is offering original ideas and sage advice about the entire tax return process. read it closely and adapt it to your practice. you will be happier, more relaxed and richer for doing so.”

– peter a. weitsen, cpa, pfs, partner, withumsmith+brown

contents

why this handbook: 10 facts and the conclusions

chapter 1: nature of tax return preparation

chapter 2: tax return preparation could be a commodity or a professional service

chapter 3: 10 reasons why you should want to improve your review process

chapter 4: review procedures = quality control

chapter 5: establishing a system

• the professional services firm business model

chapter 6: why checklists are critical

chapter 7: logistical issues

chapter 8: types of reviews

• seven types of reviews

chapter 9: preliminary cursory review

chapter 10: content review

chapter 11: issues review

chapter 12: review procedures between april 1 and april 15

chapter 13: the get-it-out-the-door method

chapter 14: top-side review

chapter 15: final review by partner before signing the return

chapter 16: recommended method for the reviewer

chapter 17: effectiveness and purpose of review

chapter 18: “don’t use eyes, use brain”

chapter 19: question to ask preparers and yourself

chapter 19: reviewer’s checklists

• reviewer’s procedural checklist for individual tax returns
• reviewer’s procedural checklist for business tax returns

chapter 20: top 12 tax return errors

chapter 21: tax payments and deduction schedule

• tax payments and state tax deduction worksheet

chapter 22: follow-up worksheets

• reviewer’s review notes
• tax season follow-up form

chapter 23: good preparer-procedures will reduce review time

• preparer’s work process and procedures checklist

chapter 24: effective self-reviews improve efficiency

chapter 25: reviewing outsourced returns

• 10 typical smart scanner errors to watch out for

chapter 26: when returns should be submitted to reviewer

chapter 27: review of complicated transactions

• 21 examples of complicated transactions that delay the review process

chapter 28: training and assigning reviewers

• 10-question reviewer qualification test
  • the answers (no peeking)
• 18 more issues that you can test

chapter 29: big picture

chapter 30: accountability

• form to measure tax return quality and performance
• 8 more ways to evaluate staff and tax season
• production for a reviewer during tax season

chapter 31: reviewer advancement

chapter 32: administrative procedures

chapter 33: reviewers’ last thing

chapter 34: partner review when signing

chapter 35: post-tax-season assessment and follow-up

• tax season follow-up sheet

chapter 36: ed’s 17-step review method

chapter 37: tax comparison schedules or worksheets

chapter 38: ed’s version of a tax comparison worksheet

• what it is
• using the excel® worksheets in the review process
• training
• planning
• cross-selling opportunities
• notice to skeptics
• sample excel® worksheets
• tax comparison schedule from tax preparation software for a simple tax return, illustration 1
• tax comparison from preparation software for a more complicated return, illustration 2
• tax comparison worksheet for a more complicated return, illustration 3
• tax comparison worksheet for a more complicated return, illustration 4, page 1
• tax comparison worksheet for a more complicated return, illustration 5, page 1
• tax comparison worksheet for a more complicated return, illustration 5, page 2
• tax comparison worksheet for a more complicated return, illustration 6, page 1
• interest income reconciliation worksheet
• dividend income reconciliation worksheet
• k-1 reconciliation worksheet
• schedule c comparison worksheet
• schedule e comparison worksheet
• worksheet to reconcile forms 1099-b and 1099-s

chapter 39: methods to reduce review time

• 9 best practices

 

plus: bonus downloads in word and excel

• with customizable forms, templates, and worksheets

 

why this handbook: 10 facts and the conclusions

1. fact: there are more preparers than reviewers.
2. fact: most preparers are at a lower level of expertise than reviewers.
3. fact: if a bottleneck is going to develop it will be at the reviewer level.
4. fact: if a new procedure can be introduced that would decrease the reviewer’s time while adding a greater amount to the preparer’s time it should be considered and likely will make the reviewers more effective and improve overall firmwide tax season performance.
5. fact: tax season is usually much busier than the rest of the year and can be very hectic.
6. fact: processes need to be established that will create uniformity of work.
7. fact: the right procedures and processes will improve preparation quality.
8. fact: the better the quality of the return’s preparation, the less time it will take to review it.
9. fact: any method of improvement of the review process has to start with the preparer.
10. fact: the reviewer is the guardian of the tax returns’ quality.

conclusions: the firm needs to put procedures in place that will improve preparation quality so that review time will be reduced while maintaining or improving quality, even if it means increasing the time of the preparers.

to do so, the firm must become sensitive to the role of the reviewers and the important part they play in assuring that the best tax returns are delivered to the clients.

 

about the authors

edward mendlowitz, cpa, abv, pfs, is a partner at withumsmith+brown, pc and is one of accounting today’s 100 most influential people.  ed is the author of 27 books and has written over 1500 articles and blogs and developed and presented over 300 professional speeches, cpe programs, and webinars. ed won the lawler award for the best article in 2001 in the journal of accountancy, the eddie award in 2018 from folio magazine for his art of accounting series in accounting today, and the 2019 innovation in accounting history education award by the american accounting association’s accounting historians section.  his practice management techniques are posted weekly at www.g005e.com, accountingtoday.com and have been reported on in the wall street journal, the journal of accountancy and many other publications.

andy mendlowitz is an award-winning journalist and author of the book, ireland’s professional amateurs. he is a graduate of the university of maryland with a degree in journalism. he started his career while still a college student with over 250 freelance articles appearing in the washington post. presently he works for gannett newspapers as a sports reporter and on contract writing assignments.

copyright 2020