reviewer training tax year 2016 - tricap.org · • help set up equipment ... basic info reviewer...

REVIEWER TRAINING

TAX YEAR 2016

WHY DO QUALITY REVIEW?

• The IRS Volunteer Income Tax Assistance (VITA) program requires a quality review process

• Need to double-check our work

• It improves accuracy!

REFUNDS CHANGE IN REVIEW

OVERVIEW

•General procedures

• Items to review

•Return Assembly

•Walk through a review

REVIEWER PROCEDURES HANDOUT

• Detailed checklist of items to review

• Overview of P+P procedures for reviewers

THE HUDDLE

• Pre-tax clinic meeting with managers and other volunteers

• Time to get updates from the IRS and P+P

• Share your expertise

• Huddles start when your volunteer shift begins

BEFORE REVIEWING

• Answer questions for everyone

• Help set up equipment

• Shadow preparers or prepare a return

STARTING A REVIEW

QUICK GUIDE TO REVIEWING

1. Check the intake paperwork for completion

2. Look over taxpayer documents

3. Review and correct entries in TaxSlayer

4. Record the return on the Reviewer Log

5. Print and assemble the return for the taxpayer

6. Provide preparer feedback

ORDER FOR REVIEW• Review returns based on sign-in number

• Adjust review order to:

– Review a return with a Priority Slip

– Make a reasonable accommodation for someone with a disability or other special situation

– Respond to a manager’s request to reorder returns

INTAKE SHEETS

• Intake paperwork helps guide an interview with the taxpayer to prepare an accurate return

• Offers necessary information for the reviewer to complete a thorough review

IRS INTAKE SHEET

• Collects basic information about the taxpayers and dependents

• Records details about income, expenses, and life events that impact the tax return

• Preparers must ask additional questions to complete several sections

IRS INTAKE SHEET COMMON ERRORS

P+P TAX INTAKE PAGE 1-2

• Use the taxpayer’s preferred name when you need to talk to them

• Preparer fill in household income amounts from income statements or interviewing the taxpayer

P+P TAX INTAKE PAGE 4

• Screening checklist will be completed by the TSS or the preparer

• Preparation checklist will be completed by the preparer

• Both should be done before you get the return

OUT OF SCOPE RETURNS

• Discuss situation with your manager

• Talk to the taxpayer as soon as possible

• Make a referral if available

Volunteer Manual Pages 15-17

GETTING MORE INFORMATION

• Politely interrupt the preparer

• Ask the taxpayer directly

• Consult your manager for assistance

TAXPAYER DOCUMENTS

• SSN/ITIN documentation for everyone on the return must be present for review

• Compare intake paperwork with the income, payment and other tax statements provided

• Photo ID does not need to be kept in the envelope for review

REVIEWING IN TAXSLAYER

• New software means a new review process

• P+P developed a suggested procedure

• All reviewers will find their own strategies over the course of the tax season

Final Steps in TaxSlayer

Form M1 and M1PR on PDF

Review Health Insurance Info in TaxSlayer

Review Form 1040 in TaxSlayer

Review Basic Info Section in TaxSlayer

Skim Return on PDF

TAXSLAYER REVIEW PROCESS

OVERVIEW

OPENING A RETURN FOR REVIEW

REVIEW RETURNS MENU

CLIENT LIST MENU

Search by taxpayer name or Social

Security number

SUMMARY VIEW AND 1040 VIEW

This comes up in the Practice Lab.

This will come up during the tax season!

SUMMARY VIEW IN DETAIL

Menus expand to show the return info line by line.

Generates a PDF of the return.

Switches to 1040 view

GENERATING A PDF1

2

3

VIEWING THE PDF

View the PDF here.

Scroll through forms, schedules and worksheets.

TaxSlayer stays open in the

background. You can easily move

back!

BASIC INFORMATION SECTION

BASIC INFORMATION SECTION

• Filing status, taxpayer , spouse, and dependent information

• Use IRS intake, source documents, and the Basic Information Section in TaxSlayer

BASIC INFO REVIEWER QUESTIONS

• Do Social Security Numbers or ITINs match the source documents?

• Does basic information, like birthdate, student status, or blindness match taxpayer entries on the intake paperwork?

• Could the taxpayers be claimed as a dependent? (especially people age 18-24)

• Are appropriate boxes checked for dependents with divorced or separated parents?

BASIC INFO REVIEW PRO TIPS

• Dependent and spouse last names auto-populate from the taxpayer’s last name

– Many families have different last names

• Changing filing status will delete the Minnesota information

– When it happens you’ll need to recreate the state return(s)

– Have the Tax Manager review your work if you did significant data entry

CHECK IT OUT IN TAXSLAYER

Basic Information Section

REVIEWING FORM 1040

REVIEW 1040 WITH SUMMARY VIEW

• Income, adjustments, deductions, taxes, credits

• Use IRS intake sheet, source documents, and the summary view in TaxSlayer

1040 REVIEWER QUESTIONS

• Is all income on the IRS intake and source documents reported in TaxSlayer?

• Did all expenses on the IRS intake and source documents get entered as adjustments or credits?

• Are additional taxes or penalties being calculated? If so, are they correctly calculating?

• Does the taxpayer qualify for the Earned Income Credit? If not, why not?

1040 REVIEW PRO TIPS

• Click back to the summary view or 1040 view to navigate to other areas to review

• Keep a big picture view—does what you see on the forms make sense for this taxpayer?

• Look for what’s missing as well as reviewing what’s there

– Forms like 8889 for HSAs or 8880 for the Savers credit are not automatically added to the return based on other entries (ex W2 codes) so add them if the taxpayer qualifies

1040 TOPICS TO WATCH:

SELF EMPLOYMENT SCOPE

• Make referrals to the P+P Self-Employment program if:

– Self-employment income over $6,000

– Business is a daycare

– Taxpayer has a net loss that does not offset other income

– Business use of the home deduction applies

Volunteer Manual Page 53


SE INCOME POSSIBLE ERRORS


• Preparers may miss expenses completely

• Cash or 1099-MISC income is often incorrectly reported on Line 21

– This is especially true in MAEPD situations

• NEW this year: “Mini SETO” at the site to help organize SE income and expenses

SETO: Self Employment Tax Organizer


MORE SE INCOME POSSIBLE ERRORS

• 1099-Misc in TaxSlayer need to be connected to a Sch C or C-EZ when entered

– it’s possible for the data to not connect anywhere



PENSION/ANNUITY INCOME

• If the taxpayer is disabled and the distribution is coded for disability, it can be considered Earned Income

• Add exceptions to paying an early distribution penalty on Form 5329

– Preparers may not enter exemptions

– Form needs to be added manually through the “Total Tax” section on the summary view

Pages 69 and 72


EIC AND DUE DILIGENCE CHECKLIST

• General rule: If someone is not getting the Earned Income Credit, you should know why

• TaxSlayer summary page provides explanations

• Some answers on the EIC checklist or general Due Diligence checklist prevent EIC calculation


EDUCATION BENEFITS

• Some tax free grants or scholarships can be treated as taxable to maximize an education credit

– Each student’s individual tax situation determines if this is helpful

Pages 106-115

• NEW this year: Education Benefits Worksheet to help organize a student’s information and record preparer notes


SCHEDULE A

• Consider both the general sales tax and income tax options

• Subtract a property tax refund received in the tax year from real estate taxes paid

• Subtract $35 from car tab registration

• Enter charitable contributions of $500+ even if the taxpayer doesn’t itemize

• Non-cash donations over $500 are out-of-scope

Pages 104-109


Federal Section: Reviewing the 1040 using summary view

HEALTH INSURANCE AND ACA

HEALTH INSURANCE AND ACA• Health coverage, exemptions, premium tax

credit, and Shared Responsibility Payment

• Use IRS intake, 1095 forms, and the Health Insurance section in TaxSlayer and/or the return PDF

ACA REVIEWER QUESTIONS

• Does the coverage reported in the return match the IRS intake sheet or 1095 form?

• Is a Shared Responsibility Payment (SRP calculated?

– If there’s an SRP, would the taxpayer qualify for an exemption?

• If the taxpayer has one, does the 1095-A from MNsure have complete information?

ACA REVIEW PRO TIPS

• Look at the IRS intake sheet and 1040 Line 61 first—for most returns it will be that easy

– If Line 61 shows full coverage and the intake sheet shows full coverage that is not from MNsure, you’re done

• Read the screens in TaxSlayer and look at updates from P+P on this topic, since TaxSlayer is still putting out new tools


Health Insurance Section

REVIEWING FORM M1

REVIEW M1 ON THE PDF

• Minnesota specific additions, subtractions, credits, and household income

• Use P+P intake sheet, source documents, and the return PDF

M1 REVIEWER QUESTIONS

• Do the P+P intake sheet or source documents indicate any additional entries for the M1?

• Did the taxpayer have any federal income that can be subtracted at the state level?

• Is household income correctly added and entered in all applicable places?

M1 TOPICS TO WATCH:

SCHEDULE M1REF

• New form to collect all refundable credits, which will all be listed together on M1 Line 25

• Schedules M1CD, M1ED, M1WFC, and new M1PSC flow here for review

M1 TOPICS TO WATCH:

SCHEDULE M1M SUBTRACTIONS

• Charitable contributions over $500 if taxpayer did not itemize

• Railroad Retirement Board income

• Income earned on an Indian reservation

• K-12 Education Subtraction

• AmeriCorps Education awards

• Military pensions

M1 TOPICS TO WATCH:

HOUSEHOLD INCOME• On the return PDF, check the M1CD and M1ED for

appropriate entries for household income

• There are several places to enter and review household income in TaxSlayer

• Watch closely for double-entered income

M1 TOPICS TO WATCH:

M1ED VS K-12 SUBTRACTION

• Taxpayers may be eligible for the K-12 education credit, the K-12 education subtraction or both!

• Still uncertain whether TaxSlayer will transfer expenses above and beyond the credit to the subtraction instead

– Assume it won’t for now!

– Check for the subtraction if taxpayer is not eligible for the credit or has expenses above the maximum allowable for the credit


State Section: Review the M1 on the PDF + in TaxSlayer

REVIEWING FORM M1PR

REVIEW M1PR ON THE PDF

• CRP and/or property tax statement information, disability status, and household income

• Use P+P intake sheet, source documents, and the return PDF

M1PR REVIEWER QUESTIONS

• Is the correct status chosen?

• Is all household income transferring correctly?

• Is the disability subtraction taken if applicable?

• Homeowners and mobile homeowners:

– Does the taxpayer have the right statement (2017) to complete the return?

– Are there delinquent property taxes owed?

– Does the property have homestead status?

M1PR REVIEW PRO TIPS

• When making changes in TaxSlayer, you’ll need to click CONTINUE several times before your changes are saved

– Click continue until you get back to the main state menu

• To complete a state only return, federal income must be entered in TaxSlayer

• Preparers will enter income on Line 21 of the federal return to allow the M1PR

– $1 for someone with no filing requirement

– The AGI from a return filed elsewhere

M1PR TOPICS TO WATCH:

M1PR ONLY RETURNS

Page 199


State Section: Review the M1PR on the PDF + in TaxSlayer

FINAL STEPS IN TAXSLAYER

E-FILE SECTION IN TAXSLAYER

• Validation errors, due diligence checklists, E-file/paper status, direct deposit

• Use source documents and preparer notes

VALIDATION ERRORS

RETURN TYPE

• Verify return is set to the appropriate type

– Electronic or paper file

– Direct deposit or mailed

DIRECT DEPOSIT

• Routing and account numbers are only entered once, so cross-check with source documents or intake sheet notes

• If taxpayer splits their refund the Minnesota refunds go to the first account listed

TAXPAYER SURVEY• Look over the taxpayer survey to ensure answers

are entered

• No need to review the answers!

P+P CONSENT FORMS

• Look over the Consent to Use and Consent to Disclose forms on the P+P Tax Intake Sheet

• If someone marks “no” discuss it with a manager

• If a taxpayer declines to consent:

– Assemble the return as a paper file return

– DO NOT record the person’s name and SSN on the reviewer log, enter CONSENT DECLINED in the name column

– TSS should return intake paperwork to the taxpayer rather than keeping for P+P records

Pages 214-216

MARK COMPLETE + APPROVE REVIEW

• On the final screen in TaxSlayer

– Mark the return COMPELETE

– Mark the return review APPROVED

SET RETURN TAGS


E-file Section

FINISHING UP

REVIEWER LOG

• 2016 returns are recorded on side one and prior year returns are recorded on side two

• Use to record basic information about each return

• Write comments about out of the ordinary situations

• Accurate logs are ESSENTIAL to a successful e-file process and are kept on record at the main office

REVIEWER LOG SIDE 1

REVIEWER LOG SIDE 2

REVIEWER CHECKLIST

• Complete the Review checklist for every return

• Reminders of key items to review

• Procedural reminders

• Record changes to refund or balance due

SAMPLE STATEMENTS FOR CHANGES

• “Entered state withholding from W-2”

• “Changed filing status to Head of Household”

• “Self-employment income entered on Sch C”

• “Corrected EIC checklist entries”

• “Disability subtraction for M1PR added”

• “Removed non-qualifying dependent”

PREPARER FEEDBACK

• Preparers want to know what they do wrong

• Providing feedback improves quality of preparation by minimizing repeat errors

• How to give feedback:

– Individual comments away from customers and other volunteers

– General comments in the Huddle or to a manager

REVIEWER TOOLS

THANK YOU

reviewer training tax year 2016 - tricap.org · • help set up equipment ... basic info reviewer...

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