TAX SEASON

ID Theft a Problem for IRS Even When It Doesn’t Exist

By

faceless hooded male person, low lighting and words "IDENTITY THEFT" repeated throughout

Either way it consumes scarce resources.

By CPA Trendlines Research

Tax return identity theft’s a bummer.

How big a bummer?

So big that even when there’s no theft, it’s a bummer.

MORE: The Nightmare of Non-credentialed Tax Preparers | Taxpayer Assistance Centers: A Good Idea That Should Be Better | IRS Still Falling Short on Service | Must the IRS Be a Dark Hole? | 10 Tips to the IRS for Beefing Up Staff | Eight Ways the IRS Can Speed Up Processing Tax Returns | IRS Plays Whac-A-Mole with the Phones | Ten IRS Problems That Need Solutions | Treasury IG Sees Progress at IRS | VCs Plunk $60 Million into AI-Powered ‘Autonomous’ Tax Prep
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It’s a bummer when it happens, not only because it happened but because the Internal Revenue Service can take up to 19 months to recognize the problem, do something about it and send the hapless taxpayer a refund not for this year’s return, not for last year’s return, but for the year before last.

And it’s a bummer when there’s no theft involved because when the IRS’s rickety technology flags a return as a possible ID theft, the return gets delayed for months and months of manual processing.
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The Nightmare of Non-credentialed Tax Preparers

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man in business suit and black ski mask flashing OK sign while sitting at desk with phone to ear

Six solutions offered.

By CPA Trendlines Research

Are you a sleazy, incompetent, unethical tax preparer?

If so, no problem! Not for you, anyway. Your clients might suffer, but as far as the Internal Revenue Service is concerned, you’re as qualified to prepare other people’s taxes as any CPA or Enrolled Agent.

MORE: Taxpayer Assistance Centers: A Good Idea That Should Be Better | IRS Still Falling Short on Service | Must the IRS Be a Dark Hole? | 10 Tips to the IRS for Beefing Up Staff | Eight Ways the IRS Can Speed Up Processing Tax Returns | IRS Plays Whac-A-Mole with the Phones | Ten IRS Problems That Need Solutions | Tax Pros Are Expanding and Earning More
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And that’s a problem.

A Wild West Environment

Tax preparers good and bad prepare over half of the country’s individual income tax returns. They play an essential role in tax administration, and they are a frontline defense in preventing fraud and error.
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The Top 12 Mistakes in Tax Return Preparation

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Businessman horrified by what he sees on computer screen

 

There’s good news, though: they’re preventable.

By Ed Mendlowitz
Tax Season Opportunity Guide

Here are the top 12 tax return preparation errors:

  1. Number transposition and spelling errors. This includes income and deduction amounts and client Social Security numbers, addresses and ZIP codes. Spelling errors should also be avoided – they indicate a lack of attention to what you are doing.

MORE ON TAX SEASON: Six Types of Person: Which Are You? | Answer These Two Questions First | Help Your Tax Clients, Help Yourself | What’s Your Value to Your Tax Clients? | Are You Excited About Tax Season?
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  1. Unreported 1099 income. Clients frequently leave out 1099s, but the preparer should make sure all 1099 items from last year are accounted for. Missing 1099s that were not final for last year should be accounted for.
  2. Tax payments. Entering incorrect and unpaid amounts can be avoided by requiring the client to provide “proof” of the payments. Entering “incorrect” amounts provided by the client is a major cause of tax notices.

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Taxpayer Assistance Centers: A Good Idea That Should Be Better

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woman addressing couple sitting at table with her

A modest proposal.

By CPA Trendlines Research

Taxpayer Assistance Centers are a great service for the tens of millions of taxpayers who can’t afford the professional help of a tax preparer. They offer a chance for a taxpayer to sit down with an actual human being who is prepared to help.

MORE: IRS Still Falling Short on Service | Must the IRS Be a Dark Hole? | IRS Plays Whac-A-Mole with the Phones | VCs Plunk $60 Million into AI-Powered ‘Autonomous’ Tax Prep | How Tax Practitioners Became Cybersecurity Risks
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Among the services TAC staff can help with are:

  • Account inquiries (help with letters, notices, levies on wages, etc.)
  • Adjustments and changes to tax account information
  • Basic tax law assistance
  • Acceptance of cash payments

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Every Accounting Firm Needs Quality Control

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man using laptop, pen marking imaginary checkboxes in air

The lowest cost always comes when the person first performing the service does it correctly.

By Ed Mendlowitz
202 Questions and Answers: Managing an Accounting Practice

Question: I want to improve my firm’s review and quality control. Do you have any suggestions?

Response: This is a recurring issue for most firms. Every CPA practice needs quality control. The issue is whether a dedicated quality control (“QC”) person is needed and, if not, how the QC can be done without one.

MORE: Three Ways to Start an Accounting Practice | Fifteen Strategies for First-Time Supervisors | No One Listens to You? Change How You Talk | Free Consultation? Not Always | Measure Knowledge Gaps (Then Close Them) | 47 Types of Business Valuation to Provide | Referral Fee? Forget It | Should You Offer Financial Services? | Thirteen Things to Consider Before You Sell Your Practice | How Much Is Your Tax Practice Worth? | Ready to Retire? Selling Your Practice Is No Strategy | Uncooperative Partner Might Not be the Problem | Merge in Lower-Priced Work without Losing Out | 20 Things You Need for a Business Valuation
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A practice is a business and every business must be run efficiently and profitably. QC is an area that I have found many firms getting tied up in and either spending nothing or much more than they should.
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IRS Still Falling Short on Service

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letter blocks with middle section rotating to change word from "quantity" to "quality"

It doesn’t seem to know which problems most need solving.

By CPA Trendlines Research

The Internal Revenue Service wants to do a better job. It really does. It got an infusion of funds (though it seems some might get taken back), and it’s got a Strategic Operating Plan with objectives for improving the taxpayer experience and modernizing operations.

MORE: Must the IRS Be a Dark Hole? | 10 Tips to the IRS for Beefing Up Staff | Eight Ways the IRS Can Speed Up Processing Tax Returns | IRS Plays Whac-A-Mole with the Phones | Ten IRS Problems That Need Solutions | Treasury IG Sees Progress at IRS | With Fresh Funding, IRS Shows Service Improvements
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And it’s made a lot of progress. But it’s still got wide open spaces to accommodate improvement.
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Must the IRS Be a Dark Hole?

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documents disappearing into dark hole

Taxpayer Advocate calls for more transparency.

By CPA Trendlines Research

The Internal Revenue Service is the one federal agency that touches nearly every American. Yet too often taxpayers and tax preparers find it all but impossible to see what they need to see in that dark and distant entity.

  • Many struggle to access information from the IRS.
  • Many have difficulty finding clear, timely, dependable guidance.
  • Many can’t determine the status of pending issues.

MORE: 10 Tips to the IRS for Beefing Up Staff | Eight Ways the IRS Can Speed Up Processing Tax Returns | IRS Plays Whac-A-Mole with the Phones | Ten IRS Problems That Need Solutions | Treasury IG Sees Progress at IRS | VCs Plunk $60 Million into AI-Powered ‘Autonomous’ Tax Prep | Tax Pros Are Expanding and Earning More | With Fresh Funding, IRS Shows Service Improvements | How Tax Practitioners Became Cybersecurity Risks | Top Tax Vendors Caught Red-Handed Selling Private Taxpayer Data
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  • Many can’t understand IRS correspondence or how to respond to it.
  • Many never find an IRS agent who can answer a question authoritatively.
  • Many find it impossible to resolve an issue.
  • Many, after experiencing any of the above, suffer the stress of confusion and frustration.
  • Many end up distrusting the tax system.

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Ten Ways to Have More Energy This Tax Season

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Young businessman sleeping on the keyboard in the office

Pssst … feel free to keep these habits going afterward, too.

By Sandi Leyva
The Complete Guide to Marketing for Tax & Accounting Firms

Is keeping a high energy level a challenge for you? Here are a few tips to revitalize your personal energy. Some of these are very simple, so simple you may think they won’t do anything for you.

MORE: Are You Crossing Off Your Business Bucket List? | Three Money Leaks and How to Plug Them | Eleven Ways to Serve Clients Even Better | Eight Ways to Build Busy-Season Stamina | Make Your Prospect Kit Stand Out | Six Ways to Beat the Competition Grow Your Revenue with Three Marketing Strategies |What Can ChatGPT Do for Accounting Professionals? | Generative AI: Should You Avoid It or Adopt It? | Want Better Clients? Here’s How | Get Your Name in the News | Four Ways Small Firms Can Beat Large Ones
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As you read, check to see which ones have slipped from your current daily routine. In that way, you’ll discover how to change your routine to gain more energy.

1. Drink plenty of water. A large amount of the aches, pains and low energy we have these days is because we are not fully hydrated. Keep a glass of water on your desk at all times and drink up.
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