1. Quality Review of Tax Return
Albany Instructors Meeting
Training Plan
November, 2016

2. QR Training – Agenda What’s new What’s not new Training Plans
Transition
2016 TaxSlayer Demo
Remaining pages are NTTC QR training
Quality review has been a consistent weak area every year in IRS Site Reviews
New page – Albany Training Class

3. QR Training – What’s New
TAXSLAYER!
QR training required for Client Facilitators
CFs must pass QR test
AARP requirement
Quality review has been a consistent weak area every year in IRS Site Reviews
New page – Albany Training Class

4. QR Training – What’s Not New
Quality Review Process Doesn’t Change
Step 1: Interview/Intake Review with TP
Step 2: Check entries on computer
Step 3: Compare with last years return
Step 4: Finish
Quality review has been a consistent weak area every year in IRS Site Reviews
New page – Albany Training Class

5. QR Training – Materials
NTTC QR package #6
OneSupport>taxtraining>materials/present ations
Also each training lesson has QR info
Gold Standard document
One support>tax training>tax law/policy
Quality review has been a consistent weak area every year in IRS Site Reviews
New page – Albany Training Class

6. Quality Review Training Plan
Present QR Process using NTTC pkg 6 (can hide pages)
Emphasize review of Intake sheets including NYS
More careful review (no carry forward)
Importance of comparing with last year’s return
Give demonstration of Quality Review in TaxSlayer
Organize TP documents, match with intake sheets
TS different ways to view forms, how to make corrections
Proceed in order of intake sheets
Making notes, setting status
Have each returning volunteer quality review a return in class
Quality review has been a consistent weak area every year in IRS Site Reviews
New page – Albany Training Class

7. First Year Transition to TS
Need practice to become comfortable with TS
How to view forms, where to make changes
Sites need to allocate enough QR time and expertise
Longer appointments, especially at start of season
Have experienced preparers QR complex returns
Assign “dedicated QR” person, if feasible
Other?
Effective QR training will help!
Quality review has been a consistent weak area every year in IRS Site Reviews
New page – Albany Training Class

8. Backup: QR Focus Areas
TaxSlayer is better than TaxWise in many areas but not all
Federal examples
1099R box 2
Gambling losses on Sch A
Pension simplified method
NYS examples
Pension exclusion and exemption amounts
Tuition credit (no red form in tree)
LTC (no carryover from federal)
Quality review has been a consistent weak area every year in IRS Site Reviews
New page – Albany Training Class

9. TaxSlayer Demonstration
Show 2016 QR demo – Gail Archer
Quality review has been a consistent weak area every year in IRS Site Reviews
New page – Albany Training Class

10. NTTC QR Training Following is NTTC presentation pkg#6
Quality review has been a consistent weak area every year in IRS Site Reviews
New page – Albany Training Class

11. 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 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
Quality review has been a consistent weak area every year in IRS Site Reviews
NTTC Training – TY2016

12. 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 – TY2016

13. 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
Designated review can be done at the preparer’s computer or at a separate station as decided by the Local/Site Coordinator. However, it must always have the taxpayer present
NTTC Training – TY2016

14. 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
Counselors must be certified for the specific tax year when reviewing prior year returns.
NTTC Training – TY2016 14

15. 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 C were completed
The Quality Reviewer should make corrections on the Intake Form if there are any noted during the QR interview
NTTC Training – TY2016

16. 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
Preparers can help the quality reviewer by making notes on the intake form to note any issues that arose during the interview
NTTC Training – TY2016

17. Intake/Interview and QR Sheet
Confirm
In-scope
Confirm
Quality Review Form C Part VIII
You must verify that the taxpayer qualifies for the Personal and Dependency Exemptions shown on the return by looking at the information on Form C. Any discrepancies should be addressed with the taxpayer.
For example: You would question a Dependency Exemption for a cousin if you see on Form C, Part II, that the taxpayer’s answer to the question “Number of months lived in your home last year” was only 3.
Review Form C, Part III to ensure all income is included on the return. It is also important to check that all the information was input in the software correctly.
Example: As part of Item 4, you verified that the taxpayer had marked the Wages box on the Form C; in Item 5 you should have verified that the EIN number was entered correctly into the software. You would now verify that all of the amounts from the W-2 are correctly showing on the return.
You should be reviewing not only what is on the return but what may have been omitted. This is especially true when it comes to Credits.
For example: You have already verified the taxpayer had a dependent who was under 17, but you do not see a Child Tax Credit on the return. You need to verify whether it was omitted or if the taxpayer does not qualify.
You should make sure that all withholding from Forms W-2 and 1099 are correctly entered on the return.
You should also verify if the taxpayer checked Yes to the question “Make estimated tax payments or apply last year’s refund to this year’s tax” on Form C, Part V.
After the Quality Review and prior to asking the taxpayer to sign their return, confirm the taxpayer understands their responsibility for all of the information on the return. This can be accomplished by pointing out the wording above the signature section of the Form 1040 or Form 8879.
Confirm
NTTC Training – TY2016

18. 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?”
Review Form C, Part III to ensure all income is included on the return. It is also important to check that all the information was input in the software correctly.
Example: You verified that the taxpayer had marked the Wages box on the Form C; you should have verified that the EIN number was entered correctly into the software. You should also verify that all of the amounts from the W-2 are correctly showing on the return.
NTTC Training – TY2016 18

19. 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
There is no one-size-fits-all process. For example, if the return is a very simple one, retracing the preparer’s steps is probably the most efficient and quickest way to review the return. Conversely, for a return that has multiple W-2s and/or 1099-Rs, it may be more effective to call up the print package and review the taxpayer’s forms against the PDF forms generated for the print package.
NTTC Training – TY2016

20. Quality Review Techniques
Compare 2016 return to paper return if available
Verify differences are reasonable and taxpayer understands reasons for any significant changes
NTTC Training – TY2016

21. 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
You must verify that the taxpayer qualifies for the Filing Status shown on the return by looking at the information on Form C. Any discrepancies should be discussed with the taxpayer.
For example: You should immediately question the Head of Household filing status on a tax return when the question in Part II of Form C – “Did the taxpayer(s) pay more than half the cost of maintaining a home for this person? (yes/no)” is not answered “yes” for at least one person.
NTTC Training – TY2016 21

22. 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
Often a tax payer will mark a block no even though they have a tax document or vice versa marking yes when they do not have a document. These inconsistencies must be resolved and the Intake Form corrected as necessary.
NTTC Training – TY2016

23. QR – Expenses/Deductions
Review all expenses reported in Part IV to ensure:
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
Again, this is where the quality review is more than just a proof reading exercise. For example, there are several ways that education expenses can be entered in the return. It is the responsibility of the Quality Reviewer to ensure that the education expenses have been applied in a manner that is most advantageous to the taxpayer.
NTTC Training – TY2016

24. QR – Life Events
Review life events in Part V to ensure any events affecting return were confirmed and correctly entered
This area is often least understood by taxpayers and often overlooked by Counselors
It is also the area that contains some of the less seldom seen items and items that are out-of- scope
This is the last section on page 2 of the intake sheet and many taxpayers do not understand this section or fail to complete it properly. It is not unusual to miss the fact that the taxpayer made estimated payments since it is a seldom seen event and even the taxpayer doesn’t recognize the question. So probing questions should be asked even if the answer is marked no, especially for self-employed taxpayers.
NTTC Training – TY2016

25. QR – ACA
Review taxpayer’s responses to ACA questions in Part VI to ensure:
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
TaxSlayer software does a good job of “walking” the counselor through ACA. The quality reviewer should carefully examine the Health Coverage section of the return by “stepping” through the data entry screen to ensure the entries properly reflect the taxpayer’s health coverage.
NTTC Training – TY2016

26. QR – ACA (Con’t)
Review taxpayer’s responses to ACA questions in Part VI to ensure:
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 – TY2016

27. QR – EIC
Ensuring taxpayer receives correct amount of EIC requires reviewing several elements of return
The EIC Due Diligence questions are a new aspect for our returning volunteers and should be answered per the TaxAide guidance.
NTTC Training – TY2016

28. 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?
The birthdates and questions in the Personal Information section for the taxpayer, spouse, and dependents have a significant impact on the EIC calculation. Children over age 19 need to have the full-time student question marked if applicable and older dependents need to have the disability block marked in order to qualify for EIC. Self-employment income can be problematic and is sometimes a source of fraud with respect to EIC.
NTTC Training – TY2016

29. 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
The Quality Reviewer should also examine the source of the bank information. If it is not a paper check or official bank document, has the Local/Site Coordinator approved the source? This will depend on District/Site policies.
NTTC Training – TY2016

30. 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
Checking a last year’s return can often reveal a document that the taxpayer has forgotten to bring or that they may not have received. For example, if the taxpayer received a pension last year it is reasonable to assume that they are still receiving that pension.
NTTC Training – TY2016

31. QR – Completion Complete Quality Review by: Reviewing tax return notes
Verifying that questions have been answered in e-file section of return
Updating Intake Sheet with notes
Entering initials in QR Field
NTTC Training – TY2016

32. QR – Completion (con’t)
Complete Quality Review by:
Answering any taxpayer questions
Advising taxpayers of their responsibility for the accuracy of information on the tax return
NTTC Training – TY2016 32

33. 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 – TY2016

34. QR Gold Standard Available on One Support
NTTC Training – TY2016

35. QR Gold Standard (con’t)
NTTC Training – TY2016

36. 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 – TY2016 36

37. Common Errors Improper SSN Incorrect name
Errors in entry: W-2, 1099R, EIN name
Improper entry of information
Improper use of 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 – TY2016

38. A good quality review takes time.
Do not short-change the taxpayer by rushing through it.
NTTC Training – TY2016

39. Quality Review
Questions?
Comments…
NTTC Training – TY2016