Quality Review of Tax Return

Form 13614-C – Part VIII

Pub 4012 – Page K-7

IRS Pub 5101

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

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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

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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

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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

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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

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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 7

Intake/Interview and QR Sheet

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Confirm

In-scope

Confirm

Confirm

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?”

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Quality Review Techniques

● Techniques include: − Retracing preparer’s steps − Reviewing 1040 view and linking to

input screens − Reviewing forms in print review − Review the new view/print screens

● QR may use one or a combination of these depending on nature of return

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Quality Review Techniques

● 3rd page of the print PDF shows basic info. Verify the info for: − ALL names − ALL birthdays & ages − ALL SSNs − ALL relationships − ALL “months” − Address and Phone − Filing status (MFJ = 2, etc) − Direct Deposit or Mailed & bank information

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Quality Review Techniques

●Compare 2017 return to 2016 paper return if available

●Verify differences are reasonable and taxpayer understands reasons for any significant changes

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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

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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

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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

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QR – Life Events

● Review life events in Part V − All events affecting return were confirmed

and correctly entered

− This area is often least understood by taxpayers and overlooked by Counselors

− It is the area that contains some of the less seldom seen items and items that are out-of-scope

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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

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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

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QR – EIC

●Ensuring taxpayer receives correct amount of EIC requires reviewing several elements of return

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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?

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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

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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 − Prior year comparison tool NOT

available for 2017 tax year

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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

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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

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QR Gold Standard Available on One Support

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QR Gold Standard (con’t)

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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

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● 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

Common Errors

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A good quality review

takes time.

Do not short-change the

taxpayer by rushing through it.

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Quality Review

Questions?

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