Academic journal article Journal of Accountancy

Tax Season Defanged: Year-Round Attention to Your Tax Preparation Practice Makes Busy Season Easier

Academic journal article Journal of Accountancy

Tax Season Defanged: Year-Round Attention to Your Tax Preparation Practice Makes Busy Season Easier

Article excerpt

Individual tax-return preparation is a small portion of most CPA firms' dollar volume, but tax season is the most visible part of an accountant's work. Although the momentum of busy season makes overall firm management simple in some ways (we make fewer big decisions then--who has time?), the sheer volume of the workload makes unconscionable demands on a CPA's energy and personal life. But such is our business, and the challenge is to run it well and improve efficiency. Whatever we can do to systematize repetitive events and spread the workload over the year makes our lives easier and allows us to make more money. Accordingly, our practice--Mendlowitz Weitsen LLP, a three-partner, 15-person firm in East Brunswick, New Jersey--has developed procedures to guide our staff and partners in processing a client's tax return, from first phone call to final invoice. We hope our system will be useful for small tax practitioners, managing partners and CPAs in tax departments of all sizes.


The essence of a successful tax season consists of:

* Effective communication within the office.

* Firmwide adherence to procedures and systems.

* Keeping everything in its place.

* A user-friendly attitude and service.

To instill respect for the tax season, foster high morale, strengthen both our firm culture and brand and give staff a feel for busy season, we put tremendous effort into training. The process is continuous, and we expect each person to learn and to grow professionally and technically. The crux of achieving that aim is to take the guesswork out of tasks. Clear rules help make review, error disclosure and training a pleasure rather than a chore both for those who instruct and our trainees.

The exhibit on page 41 tracks our procedures for preparing a tax return in about 25 steps, including obtaining preliminary client information, setting up a file, getting answers, preparing and reviewing a return, doing a final check, making corrections as needed and sending the return to the client. We prepared it for promotional reasons but now use it for training.


We make sure all our staff has up-to-date training in current tax law, and we provide them with master tax guides (CCH Master Tax Guide, RIA Federal Tax Handbook and J. K. Lasser's Your Income Tax, professional edition, with citations and references) and federal and state tax packages for reference purposes. We have a large tax library that includes all prior-year master tax guides, although most of what we might need is now online. We send tax updates to staff monthly or more often if needed. We also have access to the extensive AICPA tax division checklists and valuable AICPA CPE resources.

Our two-person tax department is the tax-planning, research and review arm of the firm as well as an in-house resource. When staff members have a question, they are required first to check the master tax guide, federal and state tax packages or the applicable instruction form before referring work to the tax department. They submit all questions in writing by e-mail with a copy to the engagement partner.


Late October through December. When we prepare returns, we also do most tax projections--a key part of the tax-planning process--for the present and following year. It's more efficient to begin them while a client's file is already open. We use the best information available, knowing it may change during the year, and check the actual amounts of the prior two or three years. The projection serves as a review tool for the current and next year and for pre-yearend meetings with some clients.

November. To strengthen clients' relationship with the firm we stay in touch by phone and email during the year. We mail a pre-yearend newsletter or letter and sometimes send a note encouraging clients to call to discuss any expressed concerns. …

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