Quality Review of Tax Return

1. Quality Review of Tax Return Form 13614-C – Part VIII Pub 4012 – Page K-28 IRS Pub 5101

2. Quality Review • IRS site reviews consistently observe that quality review process has been a significant weak area. Deficiencies include: • Failure to refer to Intake Sheet (Form 13614-C) • Little or no engagement with taxpayer • Checking only to see if data are properly entered but not evaluating overall return • Failure to inform the taxpayer that return is their responsibility NTTC Training – TY2017

3. Requirements ALL returns must receive Quality Review by 2nd certified preparer Quality Review must be completed with taxpayer(s) present The Quality Review takes place after return is prepared, but before taxpayer signs return NTTC Training – TY2017

4. When to Review • Ready to file • No need to file • Question only • Gross income • Out of scope • Need more information NTTC Training – TY2017

5. Quality Review Methods • Designated Review – preferred method • Designated Quality Reviewer • Dedicated to reviewing completed returns • Peer Review – volunteers exchange returns with each other • Self-Review – never acceptable NTTC Training – TY2017

6. Who Conducts The Quality Review? • Second Certified Tax Counselor must Quality Review EVERY return • QR on computer rather than printed return • Incomplete/missing forms are apparent • Ease of updating errors • Saves paper and ink/toner NTTC Training – TY2017

7. Quality Review Process • The process must include these elements: • All issues on tax return are within Tax-Aide scope and within certification level and training of both volunteers • Verification that all required entries on Form 13614-C were completed NTTC Training – TY2017

8. Intake/Interview Sheet Explain Quality Review Process to taxpayer Review Intake Sheet with taxpayer Review any ‘issues’ that came up during preparation Highlight any carryovers (e.g. capital loss) Respond to any questions NTTC Training – TY2017

9. Intake/Interview and QR Sheet Confirm In-scope Confirm Confirm NTTC Training – TY2017

10. Quality Review Process Look for typos, transposed digits, missing information, misspellings, etc. Compare Intake/Interview Sheet and supporting documents to return Ask taxpayer probing questions Ask: “Is there any other income?” NTTC Training – TY2017

11. Quality Review Techniques • Techniques include: • Retracing preparer’s steps • Reviewing 1040 view and linking to input screens • Reviewing forms in print review • QR may use one or a combination of these depending on nature of return NTTC Training – TY2017

12. QR – Prior Year Comparison(Available starting with TY2017) If returning taxpayer, review the Prior Year Comparison under Helpful tools Verify differences are reasonable and taxpayer understands reasons for any “significant” changes NTTC Training – TY2017

13. Quality Review Techniques Compare 2017 return to 2016 paper return if available Verify differences are reasonable and taxpayer understands reasons for any significant changes NTTC Training – TY2017

14. QR – Personal Information • Review all personal information in Parts I and II to ensure Filing Status and dependency determinations are correct • Verify data for each dependent is correct including answering the questions NTTC Training – TY2017

15. QR – Income • Review all income reported in Part III to ensure: • All tax documents were accounted for and entered • Income is consistent with prior year return, if available • Ensure all income was reported, especially self-employment and all cash income NTTC Training – TY2017

16. QR – Expenses/Deductions • Review all expenses reported in Part IV • Only qualifying expenses were entered on return • All available adjustments to income were included • Appropriate deduction (standard or itemized) was used to compute taxable income • All available credits were applied to reduce total tax NTTC Training – TY2017

17. QR – Life Events • Review life events in Part V • This area is often least understood by taxpayers and overlooked by Counselors • Estimated taxes • Capital loss carryover • It is the area that contains some of the less seldom seen items and items that are out-of-scope NTTC Training – TY2017

18. QR – ACA • Review taxpayer’s responses to ACA questions in Part VI • Minimum Essential Coverage for each month of the year was properly reflected for each person • Any appropriate exemptions were identified and recorded on Form 8965 • Any Shared Responsibility Payments are accurate and appropriate NTTC Training – TY2017

19. QR – ACA (Con’t) • Review taxpayer’s responses to ACA questions in Part VI • Form 1095-A is present for marketplace coverage • Data from any Forms 1095-A were properly entered • Premium Tax Credits were correctly reconciled, if applicable, on Form 8962 • ACA requires a comprehensive and in-depth interview NTTC Training – TY2017

20. QR – EIC (Con’t) • Careful review and interview with taxpayer key • Has the EIC Checklist been properly completed? • Is Filing Status correct? • Are birthdates correct? • Have all questions in personal information been properly answered to ensure dependents qualified? • Were disability pensions entered as wages? • Was self-employment income accurately entered? NTTC Training – TY2017

21. QR – Refund/Payment Options Review Part VII to confirm taxpayer’s preferences for receiving refund or making payment for balance due Validate bank account information was entered correctly on return NTTC Training – TY2017

22. QR – Completion • Complete Quality Review • Reviewing tax return notes • Verifying that questions have been answered in e-file section of return • Updating Intake Sheet with notes • Updating the questions section in TaxSlayer pertaining to QR NTTC Training – TY2017

23. QR – Completion (con’t) • Complete Quality Review • Answering any taxpayer questions • Advising taxpayers of their responsibility for the accuracy of information on the tax return NTTC Training – TY2017

24. Taxslayer Process • Preparer checks ready to review • Reviewer either approves or fails • Should the reviewer make corrections or mark the return failed? • If the reviewer makes corrections, who reviews the corrections? NTTC Training – TY2017

25. Feedback to Preparer Any discrepancies or errors noted should be discussed with tax preparer as appropriate This is best done privately after taxpayer has left NTTC Training – TY2017

26. Bottom Line Quality review is not just a proofreading exercise Purpose of quality review is to ensure that we file an accurate return for taxpayer which provides the highest refund (or lowest amount due) to which they are entitled NTTC Training – TY2017

27. Common Errors • Improper SSN • Incorrect name • Errors in entry: W-2, 1099R, EIN name • Improper entry of 1099 information • Improper use of 1099-R Simplified Method • Entry of 1099-OID as tax exempt • Improper calculation of EIC • Transposed characters/numbers • Return prepared with out-of-scope issues NTTC Training – TY2017

28. A good quality review takes time. Do not short-change the taxpayer by rushing through it. NTTC Training – TY2017

29. Quality Review Comments… Questions? NTTC Training – TY2017