The tax season that just ended brought special challenges, ranging from new due diligence requirements to widespread uncertainty about the whole future of American taxpaying. Now that Tax Day is fading fast in the rear-view mirror, preparers are ready to discuss what missteps made good lessons for being more prepared next year.

“I’d clone myself so that the two of me could take turns sleeping,” said John Dundon, an Enrolled Agent and president of Taxpayer Advocacy Services in Englewood, Colo. “I’d [also] remind myself every day, morning noon and night, to be more deliberate in all my works, joys actions and sufferings, even if it appears to slow the entire team down.”

“I’d make sure that clients are reminded about my policies relating to extensions,” said Jeffrey Schneider, an EA in Port St. Lucie, Fla. “It’s in my engagement letter, but many do not even read it. Though they sign it.”

“I will never again accept credit cards and offer a discount for cash,” said Morris Armstrong, an EA and registered investment advisor at Armstrong Financial Strategies, in Cheshire, Conn. “My software didn’t handle it well, and I had to make manual adjustments on each and every invoice. To top it off, everyone paid by check!”

New York EA Phyllis Jo Kubey is “continually refining and re-evaluating operations during tax season and even though I’ve just completed Tax Season No. 31, I continue to learn and evolve in managing the season,” she said.


The 8867

“This past season, I would have communicated differently and earlier with my clients that required additional information for the new due diligence requirements,” Kubey added. “Some of them had difficulty gathering documents that showed their child’s name with their mailing address.”

The IRS has established a tiered EITC Compliance Program to ensure preparers’ proper due diligence. Preparers easily -- and accurately, it seems – predicted that it would bog down the season’s workload.

The big do-over? “Provide more information to our clients regarding the paid preparer due diligence checklist and the requirements imposed on us regarding the applicable tax credits,” said Twila Midwood, an EA at Advanced Tax Centre, Rockledge, Fla.

“We put information out there in our year-end newsletter and then again in our annual tax return questionnaire, but it seemed to get lost among other information. Therefore we spent a lot of time either getting the required documentation or having clients complete our own 2016 checklist for EIC, CTC and AOTC eligibility,” Midwood said.

Ditto for EA Jeffrey Gentner, in Amherst, N.Y. “Probably the biggest thing I would do differently would be to more clearly relate to my clients the requirements needed for me to accurately and completely fill out Form 8867 so they could come to their appointment prepared to respond and verify their responses. I found myself holding many returns until such verification was provided, causing frustration for both my client and myself.”

“I did find, though,” Gentner added, “that once I fully explained why the IRS was asking for all the verification, clients accepted the requirements without complaint.”

Avoiding the deluge

“I’d get people to send in their papers sooner, even on a piecemeal basis,” Manasa Nadig, an EA and owner of MN Tax and Business Services and a partner in Harris Nadig, Canton, Mich. “People wait to gather everything and that means I get a lot of the paperwork only towards the end of March – and then there’s a deluge.”

“I know getting paperwork in batches can be a double-edged sword if one isn’t very organized,” she said, “but it seems better to start on data-entry in late January/early February, when there isn’t as much work, and only have to tie up loose ends once all the paperwork is in by the end of March.”

Nadig is now setting up “an efficient work-flow process now for next tax season and will definitely encourage clients to digitally upload to a secure portal I’ve set up, [so] next year so we avoid last-minute panic.”

“While I try to work on a first-in/first-out inventory management with the returns, there are some returns that require 10 to 20 hours to prepare,” Kubey said. “For these clients, I would’ve identified them and communicated with them sooner that their returns would need to be extended and worked after April 18, after the crunch time was over.”

“I’m still working towards less hours,” said EA Terri Ryman of Southwest Tax & Accounting, in Elkhart, Kan. “We finally went paperless in December, so it kind of threw a wrench into our tried-and-true procedures. Although it meant doing things differently,” she added, “we’re all ecstatic about the process and results. So hopefully next tax season will go much more smoothly.”

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