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Tax preparation practices, both independent and within CPA firms, have largely been automated through the use of tools such as GruntWorx, an advanced tax workflow solution that streamlines the process of organizing and inputting basic information into the appropriate spaces on tax forms.

But there remains one area that has not been fully automated, resulting in inefficiency, excessive manual labor, and thereby lower profitability.  That is the intake process – the first client meeting to gather detailed tax information to enter into the system so that it can be organized.  In today’s age of technology there is no reason why this information is still collected by the tax professional manually during the first interview.

In this blog post, we will explore three different options for automating the intake process using free and available tools and a checklist designed specifically to gather the necessary tax information.  This includes information regarding the Affordable Care Act (ACA) and current requirements for the tax-preparer to assist in the identification and eradication of false tax returns and identity theft.

Tax Intake Form

You may already have an intake checklist that covers your needs for the intake process.  However, in reviewing the intake forms from literally dozens of CPA and tax preparation firms, it’s obvious that each of these has been a “tweaked” for the needs of that particular firm.  In fact, it’s recommended that every tax practice customize its own form every year — so that it includes the latest updates to the tax code, the ACA, and other relevant changes.

Fortunately, there is an excellent starting point for those who want to update the checklist — provided by the Internal Revenue Service.  The form for gathering information for individuals can be found in Form 13614-C.  There is also a form for nonresident aliens, Form 5087.

The forms were intended for use by volunteers who prepare tax returns for free.  However, they serve just as well for the professional tax preparer due to their inferred approval by the IRS.  While at the IRS site, you might also want to look at the due diligence check list for EITC credit and the intake form for EITC.

It’s important that tax preparers are aware of their obligations to combat fraud and identity theft.  These are found in the IRS data protection program, as outlined on its “Standards and Best Practices” page.

One final note: while you’re taking input data, remember to ask a few simple questions to assist in your marketing efforts, such as:

  • How did you learn about our tax service?
  • If we were recommended by someone, can you share in your name?
  • Why are you looking to use our tax service for the first time?
  • What are your expectations about our service to you?

Three Automation Methods

There are three simple ways to automate the tax intake session.  It should be noted, however, that the automated methods operated from a web site may be more susceptible to efforts by identity thieves to file false returns.  It is therefore recommended that the use of any automated intake form be limited to clients of prior standing or those whose identity has otherwise been validated in person.

Here are the three methods:

  • Create a fillable PDF Form for download from your website. This way, existing clients can provide their information in the comfort of their own home or business, then submit it to you via client portal (email is not secure enough for this communication).  Validation of the information can be conducted by a brief telephone interview, followed by in-person validation at the time the client signs the return at your office.  Creation of a fillable PDF form will require creation software.  There are literally dozens of such software programs available, ranging from free to somewhat expensive.  Adobe Acrobat Pro DC for the desktop is one of the top contenders, and while at the high end of the price range it does have an option for month to month use for $14.95 per month.  For those unaccustomed to forms creation, Adobe also offers extensive tech support and online help in creating the forms.  There are also options to create a form in Microsoft Word or Excel, then save it as a PDF file.
  • Create an online form using Google Forms. Another free option is the use of Google Forms, available to anyone who uses the Google or Android systems.  You must have a google account, and make use of the free 15 gigabyte Google drive storage space.  There is also a program to create forms on the iPad or iPhone.  Once you have put these accounts in place, the instructions for creation of a form can be found at the Google Apps Learning Center.  The process is relatively simple, and the completed page can be posted on your web site as an HTML link.  The completed form will be saved on the web site where you can download it, review it for potential identity theft, and enter it into your tax workflow.
  • Create an online form using Microsoft Word. Word has become a powerful engine for a variety of forms that can be saved in HTML format, making it one of the simplest of forms creation systems to master.  The process is outlined at Office.com. There are also all forms available for free at Office Depot that tax preparers may avail themselves of.  For those familiar with Microsoft Word, creating a form should be relatively easy.  Another option is to use one of the many free utilities to convert a PDF file to Microsoft Word, then edit it to save as either PDF or HTML.

Automating the client input process through the creation of intake forms and online forms can save an hour of labor for each tax return.  For the typical tax preparation office, this can result in savings of a thousand or more man hours over the course of a single tax season.

It will require some work on the part of the tax preparation practice, but will result in significant savings over the long term.  That’s why a number of CPA firms have already instituted this procedure and why it may make financial sense for your practice.