Curriculum
Lesson library
Due Diligence (Form 8867, §6695) and OBBBA 2025 tracks are pinned at the top. Search by keyword — try “8867”, “SALT”, “QBI”, “due diligence”, or a lesson title.
Due Diligence & Compliance Academy
The industry's deepest due-diligence track. Circular 230, Form 8867, §6695 penalties, interview simulations, fraud detection, and a capstone exam.
What Due Diligence actually means
The legal standard, who it applies to, and why $650/failure/credit/return in 2026 adds up fast. Intent vs. negligence vs. reckless disregard.
IRC §6695 penalties in depth
§6695(a)–(g): failure to sign, failure to furnish copy, failure to keep records, failure to file information returns, negotiating client refund checks, and the due-diligence penalty itself.
Form 8867 line-by-line
Every question on the checklist, what documentation supports each 'Yes,' and what a proper contemporaneous file looks like.
The four due-diligence requirements
Knowledge, Completion & Submission of 8867, Computation worksheets, and Record retention (3 years). Miss any one → penalty per credit per return.
The knowledge requirement
'What a reasonable, well-informed preparer would ask.' Red flags, contemporaneous notes, and when to probe further.
EITC due diligence in depth
Residency, relationship, age, joint-return, and tie-breaker rules. Investment income limit. Special rules for separated spouses.
CTC due diligence
Qualifying child tests, SSN-by-due-date rule, $2,200/child for 2026, refundable ACTC piece, and 3-year DD ban after a reckless-disregard finding.
Additional Child Tax Credit (ACTC)
The refundable overflow — earned-income formula (15% × earnings over $2,500), $1,700 refundable cap for 2026, PATH-Act refund delay.
Credit for Other Dependents ($500)
Qualifying relatives, ITIN/ATIN dependents, US residency, and how ODC interacts with HOH filing status.
AOTC due diligence
First-4-years test, half-time enrollment, felony-drug question, 1098-T reconciliation, and the 40% refundable piece.
Head of Household due diligence
Unmarried/considered-unmarried test, qualifying person, and the >½ cost-of-keeping-up-a-home computation.
Interviewing clients properly
Structured intake, open vs. closed questions, motivational-interviewing techniques, and how to probe without accusing.
Required questions to ask
The must-ask questions for every EITC/CTC/AOTC/HOH client — and how to phrase them so answers hold up in an audit.
Documentation requirements
What the IRS accepts as proof: school records, medical records, landlord letters, custody orders, business logs. Sample document requests.
Record retention (3 years)
The 3-year clock, what to keep (8867, worksheets, notes, docs relied on, docs provided), and paper vs. digital storage.
Identifying fraud
Fabricated Schedule C income, fake dependents, phantom withholding, ID-theft returns. When to withdraw vs. report on Form 14157.
Red flags checklist
50 warning signs across income, dependents, credits, and documents — with the follow-up question each one triggers.
Handling conflicting information
When the W-2 doesn't match the pay stub, the birthdate on the SSA record doesn't match the ID, or the client's story shifts between visits.
Identity theft indicators
Duplicate-return rejects, IP PIN requirements, Form 14039, dependent SSN theft, and helping clients through IRS Identity Verification.
Schedule C due diligence
Reasonableness of gross receipts, ordinary/necessary expense probing, missing 1099s, and the classic 'zero-expenses' EITC trap.
Self-employment red flags
Round numbers, no records, occupation vs. income mismatch, and cash businesses that magically produce max-EITC income.
Cash businesses
Braiders, house cleaners, resellers, food vendors, childcare. Deposit method, expenditures method, and bank-statement reconstruction.
Common IRS examination findings
What preparer-office visits actually cite: missing 8867s, no notes, no docs relied upon, unreasonable Schedule C, HOH without cost-of-keeping-up.
Circular 230 essentials
§10.22 diligence, §10.34 return positions, §10.35 competence, §10.36 supervisory duties, §10.51 sanctions.
Case study: Single mom, cleaning income
Interactive walkthrough — spot the missing questions, document the file, or take the $2,600 penalty.
Case study: HOH with grandchild
Custody agreement, cost-of-keeping-up worksheet, and the tie-breaker with the actual parent.
Case study: AOTC year 5
Client insists it's year 4. 1098-T history says otherwise. Handling the pushback.
Case study: Cash braiding business
$34K gross, $0 expenses, 3 EITC kids. What to ask, what to document, what to refuse.
Final Due Diligence Examination
50-question timed exam covering the entire academy. 80% to earn the Due Diligence Certificate.
OBBBA 2025 — What Changed for Tax Year 2026
The One Big Beautiful Bill Act rewrote large pieces of the Code. Every provision preparers actually touch.
OBBBA in 15 minutes
Signed July 2025. What's permanent, what's new, what phases in, and the 2030 cliff dates.
The $40,400 SALT cap (2026)
Cap went from $10K to $40K in 2025, +1%/yr through 2029. AGI phasedown ~$505K back to $10K. MFS halves it. Reverts to $10K in 2030.
CTC bumped to $2,200
Child Tax Credit permanent at $2,200/qualifying child, inflation-indexed. Up to $1,700 refundable as ACTC for 2026.
Standard deduction & brackets 2026
OBBBA-adjusted standard deductions and the seven bracket thresholds for TY2026 — memorize these numbers.
No Tax on Tips & Overtime deductions
Above-the-line deductions for qualified tips (≤$25K) and qualified overtime premium pay (≤$12.5K/$25K MFJ), 2025–2028. Occupation list, W-2 reporting, phaseouts.
$6,000 Senior bonus deduction
New age-65+ bonus deduction stacked on top of the standard deduction, 2025–2028. Phases out at $75K/$150K MAGI.
Car loan interest deduction
Above-the-line deduction up to $10K/yr for interest on loans for new US-assembled personal vehicles, 2025–2028. MAGI phaseout $100K/$200K.
TCJA provisions made permanent
Misc. itemized deduction suspension, personal exemption = $0, mortgage interest $750K cap, and moving expense suspension — all permanent now.
§199A QBI made permanent
20% pass-through deduction is permanent. New minimum deduction floor of $400 for active QBI ≥ $1,000. SSTB phaseouts widened.
Estate & gift exemption $15M
Lifetime exemption permanently raised to $15M ($30M MFJ) starting 2026, inflation-indexed. No more 2026 sunset.
100% bonus depreciation restored
§168(k) permanent 100% expensing for property placed in service after Jan 19 2025. §179 limit raised to $2.5M with $4M phaseout.
1099-K & 1099-NEC/MISC thresholds
1099-K back to $20K/200 transactions retroactive to 2022. 1099-NEC/MISC filing threshold rises from $600 to $2,000 starting 2026.
Trump Accounts for kids
New tax-advantaged savings account for children under 18. $5,000/yr contribution limit, $1,000 federal seed for 2025–2028 births.
Preparer Protection & IRS Compliance
How to run a compliant tax practice — avoid preparer audits, protect your PTIN/EFIN, meet FTC Safeguards, and respond correctly when the IRS shows up.
Why preparers get audited
How the IRS Return Preparer Office picks targets: high-EITC volume, unusual credit patterns, RPO referrals, and whistleblowers.
Common preparer audit triggers
Elevated EITC/CTC/AOTC/HOH rates vs. peers, all-Schedule-C offices, cash-heavy refunds, mismatched EFIN volume, and repeat 8867 defects.
EFIN monitoring triggers
Volume anomalies, geographic spread, direct-deposit patterns, prior sanctions, and how the IRS e-file monitoring team flags an ERO for review.
PTIN compliance
Annual renewal, accurate identity data, disclosing felony convictions, keeping tax compliance current, and how PTIN issues cascade into EFIN issues.
Due diligence requirements
The four §6695(g) requirements — knowledge, 8867, computation worksheets, record retention — applied to EITC, CTC/ACTC/ODC, AOTC, and HOH.
Documentation requirements
What 'documents relied upon' means on 8867, contemporaneous notes, and the audit-proof client file.
Client interview best practices
Open-ended probing, follow-ups on inconsistencies, and how to document the answers so a Revenue Agent can reconstruct your reasoning.
Maintaining proper client files
Signed engagement letter, ID, source docs, 8867 & worksheets, notes, consent forms, and e-file authorization — every file, every return.
Record retention (3 years and beyond)
§6695(g) 3-year rule, §7216 consent retention, e-file 8879 retention, and when state rules require longer.
Quality review procedures
Second-set-of-eyes review, checklist-based QR, sampling for high-risk credits, and documenting the QR in the file.
Avoiding fraudulent returns
Ghost preparers, fabricated Schedule Cs, invented dependents, inflated withholding — and the criminal exposure under §7206 and §7207.
Red flags you can never ignore
Client contradictions, missing SSNs for kids, 'friend of a friend' referrals with identical returns, and the willful-blindness standard.
Identity theft prevention
IP PINs, ID verification workflow, IRS Pub 4557 controls, and what to do when a return rejects for duplicate SSN.
Refund fraud prevention
Split refunds to preparer accounts (never), refund-anticipation abuse, and the IRS RAC/RAL red flags.
Schedule C red flags
Round-number expenses, 100% business-use vehicles, cash-only receipts with zero expenses, and offices where every client is 'self-employed.'
EITC red flags
Unrelated adults claiming the same children, self-employment income exactly at the EITC peak, and residency claims that don't match address history.
CTC / ACTC red flags
SSN vs. ITIN, non-custodial parent claiming CTC, and the 'qualifying child of more than one person' tie-breaker documentation.
Head of Household abuse
Cost-of-keeping-up-a-home worksheet, temporary absence, and MFS-vs-HOH decisions that trigger 8867 line 5.
Education credit abuse
Year-5 AOTC claims, half-time enrollment, felony-drug question, and the 1098-T that doesn't exist.
Proper taxpayer verification
Photo ID, SSN cards, ITIN letters, dependents' documents, and Circular 230 §10.34 diligence-as-to-accuracy.
IRS publications every ERO needs
Pub 1345 (e-file rules), Pub 4557 (safeguarding data), Pub 3112 (IRS e-file application), and Pub 4600 (safeguards for taxpayer info).
Circular 230 compliance
§10.22 diligence, §10.34 standards, §10.51 incompetence/disreputable conduct, and OPR sanctions.
FTC Safeguards Rule (2023 amendments)
Who's covered, the nine required elements, and the 30-day breach-notice rule added in 2024.
Written Information Security Plan (WISP)
The IRS/Security Summit template, designated security coordinator, risk assessment, and annual testing.
Data security best practices
Encryption at rest and in transit, MFA, endpoint protection, phishing training, and vendor management.
Secure document storage
Encrypted portals vs. email, retention on shared drives, physical file locks, and off-boarding a staff member's access.
Taxpayer consent forms (§7216)
Consent-to-use vs. consent-to-disclose, formatting rules, and the penalties for handling a client's data without a signed consent.
Electronic signature requirements
Pub 1345 e-signature standards, KBA for remote signatures on 8879, and audit-trail retention.
Engagement letters & records
Scope, fees, out-of-scope work, termination, and the paper trail that protects you when a client complains.
What happens in a preparer audit
Program letter, opening conference, sample of returns, on-site vs. correspondence, and the closing conference.
A due diligence audit, step by step
Letter 4858, 25-return sample, IDR for 8867 and workpapers, and how a $650-per-failure computation runs.
EFIN suitability review
Pub 3112 suitability standards, criminal-history checks, tax-compliance checks, and the appeal path when denied.
Information Document Requests (IDRs)
How to read an IDR, negotiate scope, deliver responsive docs, and log every deliverable.
What to gather when the letter arrives
The 12-item preparer-audit kit — 8867s, workpapers, source docs, engagement letters, WISP, consent forms.
Responding to IRS letters
Deadlines, requesting extensions, addressing every question, and never sending original documents.
Responding to preparer penalty notices
§6694/§6695 proposal letters, protest procedures, and the 30-day window before assessment.
Working with an IRS Revenue Agent
Professional demeanor, controlling the venue, taking notes, and knowing when to bring in representation.
Handling client files during an audit
Client confidentiality, §7216 consent (or lack of it), and what you can hand over without a client authorization.
Appealing IRS findings
IRS Independent Office of Appeals, protest letters, Fast Track Settlement, and Tax Court petitions.
Correcting mistakes discovered mid-audit
Voluntary disclosure to the agent, amended returns, and how a good-faith fix reduces penalty exposure.
Best practices during an audit
Single point of contact, response log, no verbal admissions, and organized delivery packages.
Common mistakes during an audit
Missing deadlines, over-sharing, arguing on the merits before the facts are established, and skipping representation.
Preparer audit timeline
From opening letter to 30-day letter to closing conference — the typical 6–12 month arc and where delays help vs. hurt.
EFIN responsibilities
Who the responsible official is, what they sign for, and why the EFIN is bigger than any single return.
IRS e-file rules (Pub 1345)
Advertising standards, fee disclosures, refund handling, and the ERO's role in the e-file pipeline.
ERO responsibilities
Origination, transmission, acknowledgements, and the ERO's independent verification duty.
Monitoring EFIN usage
Pulling the weekly IRS EFIN report, watching volume, and catching a stolen EFIN before the IRS does.
EFIN security
Password vault for e-Services, MFA, device restrictions, and the incident-response plan when it's compromised.
Physical office security
Locked cabinets, clean-desk policy, visitor logs, disposal of source docs, and shredding requirements.
Employee access controls
Least-privilege, unique logins, disabling access on termination, and quarterly access reviews.
Password & MFA policy
Length, rotation, password managers, and MFA on every taxpayer-data system.
Annual suitability requirements
Yearly PTIN renewal, e-file application updates, tax-compliance checks, and record of continuing education.
IRC §6694 preparer penalties
Understatement due to unreasonable position ($1,000 or 50% of income) vs. willful/reckless ($5,000 or 75%).
IRC §6695 preparer penalties
Failure to sign, furnish copy, retain records, file information returns, and the $650/failure due-diligence penalty (2026 amount).
Fraud, negligence & reckless conduct
Distinguishing negligence from reckless disregard from fraud — and how each moves the penalty tier.
Criminal exposure (§7206, §7207, §7216)
Aiding a false return, disclosing without consent, and the felony threshold for tax preparers.
Suspension & disciplinary action
OPR proceedings, Circular 230 §10.60–§10.82, and interim suspension when the IRS believes the public is at risk.
EFIN revocation
Grounds, notice, the appeal path, and running a practice while under appeal.
Office-wide sanctions
When one preparer's misconduct puts the whole EFIN at risk, and how to firewall an office.
Federal Individual Income Tax
Form 1040 top to bottom — wages, deductions, credits, brackets, refunds.
The 1040 in 10 minutes
Filing statuses, dependents, AGI vs. taxable income.
Reading a W-2 & 1099
Box by box: what each number means and where it lands on your return.
Standard vs. Itemized
SALT cap, mortgage interest, charity, medical thresholds.
Credits: CTC, EITC, Saver's, Education
Refundable vs. nonrefundable and how phaseouts work.
Self-Employed & Small Business
Schedule C, SE tax, quarterly estimates, LLCs, S-corps, C-corps.
Schedule C from scratch
Gross receipts, COGS, ordinary and necessary expenses, home office.
Self-employment tax
The 15.3% you owe on top of income tax — and the deductible half.
Quarterly estimated taxes
Form 1040-ES, safe harbors, avoiding underpayment penalties.
LLC vs. S-corp vs. C-corp
Pass-through vs. reasonable comp vs. double taxation.
QBI (§199A) deduction
The 20% pass-through deduction and its ugly phaseouts.
Payroll Taxes (Employer)
W-4, FICA, FUTA, SUTA, 941, 940, W-2 filing.
Common W-4 mistakes (with fixes)
Step 2(c) checked wrong, Step 3 dollar amounts, Step 4(a) other income, and Step 4(b) deductions gotchas — each with a worked example.
FICA & Additional Medicare
Social Security wage base, Medicare, 0.9% surtax.
Multi-state SUTA
Which state gets the unemployment tax when workers are remote.
Sales & Use Tax (All 50 States)
Nexus, marketplace facilitators, exemptions, and remittance.
Marketplace facilitator laws
When Amazon/Etsy/Shopify collect for you.
Exemption certificates
Resale, manufacturing, nonprofit — and audit risk.
SaaS & digital goods taxability
The 50-state patchwork for software and streaming.
Investments, Crypto & Capital Gains
Schedule D, wash sales, crypto, K-1s, dividends.
Crypto taxation
Every swap is a taxable event; staking, airdrops, DeFi.
Property, Estate & Gift Tax
Property tax basics, §1031, estate tax, gifting strategies.
Massachusetts Deep Dive
Sample state track — 5% flat rate, Millionaire's surtax, state-specific credits.
The 4% Millionaire's surtax
How Chapter 62F and the 4% surcharge interact.
Senior Circuit Breaker credit
Refundable credit for eligible seniors.
One Big Beautiful Bill Act (OBBBA) — Deep Dive
The July 2025 legislation that rewrote large pieces of the Code. Plain-English lessons, before/after comparisons, worked examples, and a final assessment.
OBBBA in 15 minutes
Signed July 2025. What's permanent, what's new, what phases in, and the 2030 cliff dates.
Individual tax changes — the full list
Rates, brackets, standard deduction, personal exemption, itemized deductions, credits, and phaseouts — every change to Form 1040.
Business tax changes — the full list
§199A, §168(k) bonus, §179, R&D expensing, interest limitation, corporate rate, and pass-through changes.
New deductions catalog
Tips, overtime, senior bonus, car-loan interest, Trump Accounts, expanded HSA. Eligibility, caps, phaseouts, and W-2 reporting.
New and expanded credits
CTC bumped to $2,200, adoption credit refundability, expanded dependent care, and modifications to clean-energy credits.
Phaseout math you'll actually run
SALT AGI phasedown, senior bonus phaseout, tips/OT MAGI phaseout, and Trump Account eligibility ranges. Worked examples.
The $40,400 SALT cap (2026)
Cap went from $10K to $40K in 2025, +1%/yr through 2029. AGI phasedown ~$505K back to $10K. MFS halves it. Reverts to $10K in 2030.
CTC bumped to $2,200
Child Tax Credit permanent at $2,200/qualifying child, inflation-indexed. Up to $1,700 refundable as ACTC for 2026.
Standard deduction & brackets 2026
OBBBA-adjusted standard deductions and the seven bracket thresholds for TY2026 — memorize these numbers.
No Tax on Tips & Overtime deductions
Above-the-line deductions for qualified tips (≤$25K) and qualified overtime premium pay (≤$12.5K/$25K MFJ), 2025–2028.
$6,000 Senior bonus deduction
New age-65+ bonus deduction stacked on top of the standard deduction, 2025–2028. Phases out at $75K/$150K MAGI.
Car loan interest deduction
Above-the-line deduction up to $10K/yr for interest on loans for new US-assembled personal vehicles, 2025–2028.
TCJA provisions made permanent
Misc. itemized deduction suspension, personal exemption = $0, mortgage interest $750K cap, and moving expense suspension — all permanent now.
§199A QBI made permanent
20% pass-through deduction is permanent. New minimum deduction floor of $400 for active QBI ≥ $1,000. SSTB phaseouts widened.
Estate & gift exemption $15M
Lifetime exemption permanently raised to $15M ($30M MFJ) starting 2026, inflation-indexed. No more 2026 sunset.
100% bonus depreciation restored
§168(k) permanent 100% expensing for property placed in service after Jan 19 2025. §179 limit raised to $2.5M with $4M phaseout.
1099-K & 1099-NEC/MISC thresholds
1099-K back to $20K/200 transactions retroactive to 2022. 1099-NEC/MISC filing threshold rises from $600 to $2,000 starting 2026.
Trump Accounts for kids
New tax-advantaged savings account for children under 18. $5,000/yr contribution limit, $1,000 federal seed for 2025–2028 births.
Tax planning opportunities under OBBBA
Roth conversion timing, bunching itemized deductions under the higher SALT cap, tips/OT deduction stacking, and entity-choice implications.
Before vs. after: side-by-side
Twenty typical client scenarios rendered under 2024 (pre-OBBBA) vs. 2026 (post-OBBBA) rules. Refund deltas explained.
Worked examples
Ten fully computed returns showing how each OBBBA change flows through Form 1040 line by line.
Interactive OBBBA impact calculator
Enter a client scenario; see the refund difference between prior law and OBBBA, with the citation for each change.
Final OBBBA Assessment
40-question exam covering every OBBBA provision. 80% to earn the OBBBA Certified Preparer badge.
Business Tax Academy — Sole Proprietorship
Schedule C from cover to signature. Income, expenses, home office, vehicle, depreciation, inventory, COGS, QBI, and estimates.
The sole proprietor at a glance
What it is, why it defaults for single-member LLCs, and how income flows to Schedule C and SE.
Schedule C anatomy
Parts I–V walkthrough. Every line and where it comes from.
Business income
Gross receipts, returns, other income (1099-K, barter, recovery of bad debts), and constructive-receipt timing.
Ordinary and necessary expenses
The §162 standard, categorized Part II expenses, and the 'other expenses' schedule.
Home office deduction
Regular-and-exclusive-use, simplified $5/sq-ft method vs. actual expenses, Form 8829, and the sale-of-home recapture.
Vehicle expenses
Standard mileage vs. actual, contemporaneous log, luxury auto limits, and Form 4562 Part V.
Depreciation on Schedule C
MACRS, §179 ($2.5M limit for 2026), 100% bonus (§168(k)), listed property, and recapture.
Inventory & Cost of Goods Sold
Beginning inventory, purchases, labor, materials, ending inventory. Cash-method inventory rules for small businesses.
QBI (§199A) for Schedule C
20% deduction, SSTB rules, W-2 wage and UBIA limits, and the new $400 minimum floor for active QBI ≥ $1,000.
Estimated taxes (1040-ES)
Safe harbors, annualized income method, and quarterly due dates. When to file.
Business Tax Academy — Partnerships
Form 1065 top to bottom. Basis, guaranteed payments, K-1s, capital accounts, allocations.
Partnership taxation overview
Pass-through, entity vs. aggregate theory, and the four schedules on Form 1065 (K, K-1, L, M-1, M-2).
Form 1065 walkthrough
Ordinary business income, separately stated items, and the Schedule K roll-up.
Partner basis
Inside vs. outside basis, contributions, distributions, income/loss, liabilities (recourse vs. nonrecourse), and the basis-worksheet requirement.
Guaranteed payments
§707(c) payments, treatment on 1065 vs. K-1, SE tax implications.
Reading a Partnership K-1
Box-by-box: ordinary income, rental, portfolio, guaranteed payments, §179, self-employment earnings, distributions, and capital accounts.
Capital accounts
Tax-basis capital reporting (required since 2020), §704(b) book capital, and the ending-vs-beginning reconciliation.
Partnership allocations
§704(b) substantial economic effect, special allocations, and the §704(c) built-in gain rules.
Business Tax Academy — S Corporations
Form 1120-S, shareholder basis, reasonable comp, K-1s, distributions, BIG tax, and accountable plans.
S corp taxation overview
Subchapter S election, one class of stock, 100-shareholder limit, and pass-through treatment.
Form 1120-S walkthrough
Ordinary business income, separately stated items, Schedules L / M-1 / M-2, and the AAA account.
Shareholder basis
Stock basis, debt basis, ordering rules for losses/deductions/distributions, and Form 7203.
Reasonable compensation
The single biggest S-corp audit issue. Factors, benchmarks (RCReports, BLS), documentation, and reclassification risk.
Payroll requirements
Owner-officer W-2s, FICA/Medicare, quarterly 941s, annual 940 and W-3, and how the payroll interacts with 1120-S line 7.
Reading an S corp K-1
Box-by-box: ordinary income, portfolio, §179, distributions, health insurance for 2%+ shareholders.
Distributions & AAA
Ordering rules: AAA → E&P → other adjustments account → return of basis → capital gain. How distributions differ from wages.
Built-in gains tax
§1374 5-year recognition period for former C corps, and how the 21% BIG tax bites on appreciated assets.
Accountable plans
Reimbursing owner-employees for home office, mileage, travel — without adding to W-2 wages. Sample plan language.
Business Tax Academy — C Corporations
Form 1120, the 21% corporate rate, dividends, retained earnings, and the double-tax problem.
C corp taxation overview
Separate taxable entity, 21% flat rate (permanent under OBBBA), and the classic double-tax problem.
Form 1120 walkthrough
Income, deductions, tax and payments, Schedules C / J / K / L / M-1 / M-2. How each schedule reconciles book to tax.
Dividends: taxation on both sides
Qualified vs. non-qualified dividends, the dividends-received deduction (50/65/100%), and constructive dividends.
Retained earnings & E&P
Current vs. accumulated E&P, and the accumulated earnings tax (§531) trap.
Corporate deductions
Charitable (10% limit), NOL carryforward (80% limit), business interest (§163(j)), and executive compensation ($1M cap).
Double taxation and planning
Salary vs. dividend, fringe benefits, and when a C corp actually beats an S corp for very-profitable owners.
Business Entity Selection
Sole prop vs. LLC vs. partnership vs. S corp vs. C corp — advantages, disadvantages, and when to switch.
The five-way comparison
Formation, liability, taxation, payroll, admin burden, and exit — all five entities in one table.
Sole proprietor: pros and cons
Simplest setup, full SE tax, unlimited personal liability, and no continuity.
LLC: pros and cons
State-law liability shield, default federal tax classification (disregarded vs. partnership vs. S/C election), and operating agreements.
Partnership: pros and cons
Two+ owners, pass-through with SE on active income, flexibility of allocations, and joint-and-several liability.
S corp: pros and cons
Payroll-tax savings on distributions, reasonable-comp discipline, ownership restrictions, and admin overhead.
C corp: pros and cons
Flat 21% rate, unlimited investors, §1202 QSBS exclusion, and the double-tax cost.
The decision matrix
Revenue thresholds, owner mix, exit plans, and payroll-tax break-even — the practitioner's decision framework.
Business Formation
From EIN to first annual report. Everything a new business needs before its first return.
EIN applications
SS-4, online vs. fax, foreign owner (no SSN/ITIN) route, and common rejects.
LLC formation
State selection, articles of organization, published notice states (NY/AZ), and post-filing checklist.
Corporation formation
Articles of incorporation, bylaws, organizational minutes, stock issuance, and 83(b) elections.
S corporation election
Form 2553, timing (within 2 months + 15 days), late-election relief under Rev. Proc. 2013-30, and Q sub.
Registered agents
Why every state requires one, in-state address rules, and consequences of resigned agents.
Operating agreements
The single document that saves LLCs from disputes. Members, management, allocations, distributions, transfers, dissolution.
Annual reports & franchise tax
State-by-state matrix, DE franchise tax, CA $800 minimum, and consequences of falling out of good standing.
Ongoing compliance
BOI reporting (FinCEN), meeting minutes, corporate formalities, and piercing-the-veil defenses.
Business licenses
Federal (limited: firearms, alcohol, transportation), state, county, city, and professional licenses.
Record keeping systems
Chart of accounts, source documents, digital retention, and integrating with tax prep software.
Payroll Taxes — Expanded Track
Every employer form a preparer touches, plus worker-classification and 1099 reporting.
W-2 preparation
Box-by-box, Codes in Box 12, and how retirement plans / 401(k) / HSA affect Boxes 1 / 3 / 5.
Form W-3 transmittal
Aggregating W-2s, reconciling to Form 941, and SSA e-file (BSO / SSAR).
Form 941 quarterly
Line-by-line, deposit schedule triggers, and quarterly reconciliation to payroll registers.
Form 940 (FUTA)
Annual employer unemployment tax, 0.6% net rate (after credit), state credit reductions, and Schedule A.
Form 944 (small employer annual)
≤$1,000 annual liability threshold, opt-in/out, and reconciliation.
Payroll tax deposits
Monthly vs. semi-weekly schedule, $100K next-day rule, and safe harbors.
EFTPS
Enrolling, scheduling deposits, and confirmation numbers as audit defense.
FUTA in depth
6.0% gross rate, 5.4% credit, $7,000 wage base, and credit-reduction states.
FICA in depth
6.2% Social Security ($176,100 wage base 2026 projection), 1.45% Medicare, and employer match.
Additional Medicare Tax
0.9% on wages > $200K (single), employer withholding requirement, and reconciliation on Form 8959.
Federal withholding
Percentage method vs. wage bracket method, Pub 15-T, and 2020+ W-4 vs. pre-2020 W-4 tables.
State income tax withholding
Reciprocity agreements, state W-4 equivalents, and multi-state remote workers.
New hire reporting
20-day state reporting requirement, W-4/I-9, and E-Verify.
Employee vs. independent contractor
Common-law test (behavioral, financial, relationship), Form SS-8, and the §530 safe harbor.
Backup withholding
When 24% kicks in (bad TIN, notified payee), CP2100/2100A notices, and B-notice procedures.
Form 1099-NEC
Non-employee compensation, $2,000 threshold for 2026 (OBBBA), January 31 due date, and TIN matching.
Form 1099-MISC
Rents, royalties, prizes, medical payments, and the box-by-box mapping.
IRS Representation Academy
Speak for the client. POAs, notices, installment agreements, penalty abatement, appeals, and collections.
Form 2848 — Power of Attorney
Line-by-line, matter/period scope, joint filers, checkbox authorities, and CAF processing.
Form 8821 — Tax Information Authorization
Info-only access, differences from 2848, and third-party authorization workflows.
IRS notice catalog
The 25 most common notices — CP-2000, CP-14, CP-59, CP-90, LT-11, Letter 226-J — and the response template for each.
Installment agreements
Streamlined (<$50K), guaranteed (<$10K), non-streamlined, and PPIA. Form 9465, Form 433-D/F, and the direct-debit reduction.
Penalty abatement
First-time abatement, reasonable cause, statutory exceptions, and Form 843.
IRS Appeals
CDP hearings (Form 12153), CAP appeals, and small-case vs. formal protest letters.
Collections process
Notice sequence CP-14 → CP-501 → CP-503 → CP-504 → LT-11 / Letter 1058, and CSED (10-year statute).
Practitioner Priority Service
The 866-860-4259 line, wait-time strategy, e-Services alternatives, and effective call scripts.
Identity theft representation
Form 14039, IP PIN enrollment, IRS Identity Verification Service (IDVerify), and reconstructing e-file rejects.
IRS communication playbook
Written correspondence rules, response deadlines, certified mail, and building a defensible file.
Tax Resolution Academy
Back taxes, OICs, liens, levies, CNC, innocent spouse, and audit representation.
Back taxes: reconstructing prior years
Wage & income transcripts, SFR (substitute for return) reversal, and prior-year software strategy.
Installment agreement strategy
Which agreement fits which balance, Form 433 disclosures, and negotiating payments.
Offer in Compromise
Form 656, Form 433-A(OIC)/B(OIC), reasonable-collection-potential, and lump-sum vs. periodic.
Federal tax liens
Auto-attach at assessment, NFTL filing/refile/release, discharge, subordination, and withdrawal.
Levies
Bank levies, wage garnishments (continuous), CP-504 vs. LT-11 sequence, and release requests.
Currently Not Collectible
Financial hardship standard, National Standards allowable expenses, and CSED interaction.
Innocent spouse relief
Form 8857, traditional / separation-of-liability / equitable relief, and community-property complications.
Penalty relief in depth
FTA eligibility check, reasonable-cause narratives that actually work, and appealing denials.
Audit preparation
IDR responses, engagement scoping, key facts, workpapers, and how to run a defensible audit representation.
Ethics & Professional Standards
Circular 230, PTIN, EFIN, preparer penalties, confidentiality, and the FTC Safeguards Rule.
Circular 230 top to bottom
Subparts A–D. Practitioner duties, best practices, prohibited conduct, and sanctions.
PTIN rules
Who needs one, annual renewal, IRS Directory, and consequences of preparing without a valid PTIN.
EFIN responsibilities
Application (Form 8633 online), suitability checks, monitoring rejects, and revocation risks.
Preparer penalties
§6694 (understatement), §6695 (procedural), §6700 (abusive shelters), §6701 (aiding & abetting), §7216 (disclosure).
Preparer fraud
What crosses from aggressive to criminal, referrals to IRS-CI, and self-protection procedures.
Confidentiality (§7216)
Consent-to-disclose vs. consent-to-use, form-driven requirements, and cross-border referrals.
Data security fundamentals
IRS Pub 4557, encryption at rest and in transit, MFA, and phishing-resistance.
FTC Safeguards Rule
Who's covered (every paid preparer), the nine elements, and the June 2023 amendments (breach reporting).
Written Information Security Plan (WISP)
IRS Pub 5708 template, designating a security coordinator, risk assessment, and employee training.
Professional ethics in practice
Conflicts of interest, fee arrangements, client-terminating letters, and standards of tax advice.
Running a Successful Tax Business
From storefront to scalable operation. Workflow, pricing, marketing, staff, and bank products.
Starting a tax business
Entity choice, EFIN, insurance (E&O), software selection, and the pre-season checklist.
Office workflow
Intake → interview → prep → review → sign → deliver → follow-up. Kanban, checklists, and time-per-return targets.
Pricing strategies
By-the-form, by-the-hour, value pricing, and market benchmarks by return type.
Client intake
Engagement letters, KYC checks, ID verification, and structured onboarding forms.
Document collection
Standard checklists by return type, encrypted upload, and reconciling missing docs.
Client portals
Comparison of major portals, security requirements (encryption, MFA), and integrating with prep software.
CRM systems
Contact records, pipeline stages, automated reminders, and reporting.
Marketing
Local SEO, Google Business Profile, referral programs, community sponsorships, and off-season outreach.
Client retention
Annual planning meetings, birthday touches, IRS-notice response service, and year-end letters.
Referrals
Structured referral asks, partner networks (financial advisors, attorneys), and tracking sources.
Bank products (RTs, RALs)
How refund transfers work, compliance requirements, fee disclosure, and consumer-protection issues.
Refund advances
Product mechanics, underwriting, disclosure requirements, and IRS/state-level restrictions.
Staff training
In-season vs. off-season training, review workflow, and continuing-education compliance.
Hiring preparers
Interviewing for tax skill, background/PTIN checks, tiered compensation, and non-compete considerations.
Audit Triggers & Risk Reduction
The line items the IRS actually pulls returns on — and how to prepare defensibly.
Schedule C audit triggers
Loss years, DIF-scored ratios, disproportionate expense categories, and how to bulletproof the file.
Home office scrutiny
Regular-and-exclusive test, photographic evidence, and sale-of-home recapture surprises.
Vehicle expense audits
Contemporaneous log requirement, sampling methods, and when standard mileage saves the file.
Cash businesses
Bank-deposits method, T-account reconstruction, and unreported-income indicators.
Large charitable donations
$250 written acknowledgment, $500 Form 8283, appraisal requirements ($5K+), and DAF timing.
Crypto audits
Digital asset question, wallet tracing, cost-basis reconstruction, and John Doe summonses.
Gambling income & losses
W-2G, session accounting, professional-gambler status, and Schedule A limits.
Hobby loss rules (§183)
Nine-factor test, presumption safe harbor (3 of 5 years), and how to argue profit motive.
Rental loss audits
Passive activity limits (§469), $25K special allowance, and real-estate professional status.
EITC audit red flags
Where auditors focus: relationship, residency, self-employment reasonableness, and 4-year DD bans.
Tax Planning Academy
Turn preparers into planners. Year-end, retirement, entity, family, and multi-year strategy.
End-of-year planning
Bunching, prepay/defer income and deductions, Roth conversions, and 12/31 gotchas.
Retirement planning
401(k) / IRA / SEP / SIMPLE / Solo-K limits, catch-ups, and Roth vs. traditional decision framework.
Roth conversions
Bracket-fill strategy, IRMAA cliffs, backdoor & mega-backdoor Roth, and reconversion timing.
Capital gains planning
Tax-loss harvesting, 0% bracket harvesting, wash sales, gifting appreciated stock, and QSBS.
Estimated tax strategy
Safe harbors (100%/110% prior-year, 90% current), annualized method, and withholding vs. estimates.
Business planning
Reasonable comp planning, retirement plans in the business, §179 timing, and accountable-plan use.
Entity planning
S-election timing, LLC-to-S conversion, C corp for fringe/§1202, and multi-entity structures.
Family tax planning
Kiddie tax, gifting, §529 plans, hiring your kids, and multigenerational wealth transfer.
Client Interview Simulations
Interactive client interview simulations. Ask the right questions or fail due diligence.
Single mom, 2 kids, cash income
Ask the residency, relationship, and reasonableness questions Nova requires — or watch the case grade drop.
HOH with a grandchild
Custody, cost-of-keeping-up, and tie-breaker interview.
Cash braiding business
Gross receipts inquiry, expense probing, banking, and books-and-records questions.
AOTC — is it year 5?
1098-T history, prior returns, half-time enrollment, and felony-drug question.
Rental loss with new landlord
Active participation, hours worked, professional-status test, and passive-loss carryover.
S corp owner, no W-2
Reasonable-compensation interview, distributions history, and payroll-set-up recommendation.
Tax Mistake Library
Dozens of intentionally-wrong returns. Find the mistakes, fix them, submit for grading.
Wrong filing status
A return filed Single that should be HOH — spot it, fix it, explain the tax impact.
Missing 1099-NEC
Bank statements show contract deposits not on the return. Handle the amendment.
Incorrect dependent
Client claimed a niece who lived with them 4 months. Fix the return and Form 8867.
Wrong credits claimed
AOTC year 5, CTC without SSN, ODC for a nonresident alien — three drills.
Schedule C errors
Personal expenses run through business, capitalized items expensed, missing SE tax. Fix all three.
Math errors
Classic transposition, wrong bracket lookup, and standard-deduction override. IRS auto-correct vs. amendment.
Missing forms
Missing Form 8606, missing Schedule D, missing Form 8962. Which fixes need 1040-X, which don't.
Form 8867 errors
Answers that don't match the return, no docs relied upon, missing HOH question. Penalty exposure.
Missing due diligence
8867 filed, but no notes and no worksheets. What to add to the file and how to survive an audit.
Incorrect deductions
SALT over the cap, mortgage interest on a non-qualified residence, personal medical claimed as business.
Incorrect income
1099-K double-counted, 1099-B basis missing, and taxable Roth conversion mislabeled.
E-file rejects
The 20 most common reject codes — R0000-503, IND-032, F1040-164 — and the fix for each.
The 90-Day Tax Success Blueprint
The action plan to build a thriving tax preparation career in 90 days. Business development, marketing, productivity, and confidence — for preparers who already know how to prepare returns.
Set a realistic income goal
Working backwards from a target — take-home vs. gross, seasonal cash flow, and the difference between a goal and a wish.
How many returns do you need?
Average-fee math, mix of 1040 vs. Schedule C vs. business, and the client-count you actually have to serve.
Set your pricing (and defend it)
Flat fee vs. per-form vs. value-based, minimum fee floors, and how to raise prices without losing clients.
Break the goal into weekly targets
13-week season map, front-loaded weeks, and the leading indicators that predict a hit-or-miss quarter.
Build a daily action plan
Money-making tasks first, batching admin, and the 3-task rule that keeps you moving when the day gets loud.
Create accountability habits
Daily scorecard, weekly review ritual, and one accountability partner — the difference between a plan and a result.
Define your ideal client
Who you want to serve, where they are, what they pay for, and why most preparers skip this step and stay stuck.
Facebook marketing that actually books returns
Personal profile vs. business page, posting cadence, and the 5 post types that consistently generate DMs.
Facebook groups: join, contribute, convert
Which groups to join, the give-first rule, how to answer questions that build authority, and the DM handoff.
Build a referral engine
The 'ask' script, referral rewards that don't feel gross, and why happy clients still need to be reminded.
Networking without cringing
BNI, Chamber of Commerce, coffee chats, and the 30-second intro that gets remembered.
Community events & speaking
Free tax talks at libraries, churches, schools, gyms — the venues that convert to paying clients.
Google Business Profile
Complete profile, photos, weekly posts, review acquisition, and ranking in the local map pack.
Social proof: reviews & testimonials
How to ask, when to ask, video testimonials, and displaying proof where it changes decisions.
Building trust before the first meeting
About page, credentials, response speed, and the 3 signals prospective clients screen for.
What to post (and what to never post)
The 4 content pillars — educate, entertain, inspire, sell — and the 80/20 balance that keeps followers.
Educational content that converts
Tax-tip posts, myth-busting, deadline reminders — packaged so a non-preparer actually reads them.
Reels & short-form video
Hook in 3 seconds, on-screen text, hashtag strategy, and the 6 reel formats every preparer can shoot.
Building authority
Consistency over virality, showing your work, and how 90 days of steady posting outperforms one viral video.
Content-idea prompts and templates
Prompt patterns for hooks, captions, and script outlines — plus the human edit that keeps it yours.
Create a professional brand
Name, palette, headshot, logo, and the 5-page website that most solo preparers should stop at.
The 90-day content calendar
A day-by-day plan for Jan–Mar that anyone can execute — with room to remix during the season.
Respond in under 5 minutes
Why response speed is the single biggest lever, and how to run the first-touch play whether you're at your desk or not.
The consultation script
Discovery questions, mirror-and-summarize, and the two questions that surface the real budget.
Explain your value (not your process)
Outcomes over deliverables, price-anchoring, and framing 'why me' without knocking competitors.
Handle common objections
'Too expensive,' 'let me think,' 'my cousin does it for free' — with scripted responses that don't get pushy.
Follow up without stalking
3-touch rule, spacing, channel-mix, and the polite 'closing the loop' text that revives dead leads.
Close the client
Assumptive close, engagement letter delivery, first-payment collection, and the calendar invite that seals it.
Professional communication standards
Response-time SLA, tone of voice, and the templates that make a solo look like a firm.
Appointment reminders that reduce no-shows
3-touch reminder cadence, day-before checklist, and the confirmation that doubles show rate.
Secure document collection
Client portal vs. encrypted email vs. drop-off, checklist-based intake, and the 'missing docs' status page.
Keep clients informed
Status updates at 5 milestones, proactive delay notice, and 'no news' anti-pattern.
Excellent service = repeat clients
Delivery meeting, next-year handoff, and the tiny extras that turn a $300 client into a lifelong one.
Requesting reviews the right way
When to ask, what to ask, private-first triage, and the review-link workflow that consistently gets 5 stars.
Asking for referrals
The ask script, referral cards, and warm-intro requests that don't put clients on the spot.
The preparer's daily workflow
Morning intake sweep, deep-work block, client calls window, admin bucket — and where to guard the day.
Stay organized under load
Client status board, WIP limits, and the 3-column kanban that keeps 100 clients from turning into chaos.
Time management during peak season
Time-blocking, batching similar returns, and cutting the 3 tasks that eat the most hours.
Prioritize tasks the right way
Impact vs. urgency, the money-first rule, and how to say 'not today' to a demanding client.
Automation to save hours per week
Draft emails, first-pass research, script rewrites, meeting recaps — and the guardrails to keep automation safe near client data.
Avoiding burnout in tax season
Sleep, movement, boundaries, planned days off, and the 3 warning signs that mean stop today.
Organic marketing basics
Why organic beats paid for most new preparers, and the compounding effect of consistent posting.
Community engagement
Local Facebook groups, church newsletters, gym bulletin boards, and the small-market plays that outperform ads.
Live videos that book appointments
Weekly 'Tax Talk Tuesday,' pre-promotion, on-camera basics, and the CTA that converts viewers to leads.
Educational posts as long-term marketing
Evergreen posts, series content, and how to package one lesson into 5 formats.
Referral partnerships
Real estate agents, financial planners, insurance agents, business coaches — mutually profitable partnerships in 5 steps.
Build credibility over 90 days
Certifications, testimonials, published articles, speaking gigs — the trust stack that shortens the sales cycle.
Appointment scheduling
Calendly, Acuity, and the buffer rules that stop back-to-back meetings from destroying focus time.
CRM basics for solo preparers
Contacts, stages, statuses, and the 3 fields you actually need before you buy fancy software.
Automated client reminders
Missing-doc nudges, review-and-sign reminders, and payment prompts that don't sound robotic.
Automation tools every preparer should try
Note-takers, transcribers, email drafters, and content generators — with the 'never upload PII' rule.
Follow-up automation
Drip sequences for leads, dormant-client reactivation, and the 12-month client lifecycle plan.
Templates for everything
Engagement letters, welcome emails, missing-doc requests, delivery notes, review requests — the top 10 saved-response library.
Checklists that prevent mistakes
Intake, review, delivery, e-file, retention — a short checklist beats a long memory every time.
Measure progress against the plan
Revenue-to-date vs. target, returns-completed vs. target, and how to read a slipping trend line before it's too late.
Improve your weakest area
Diagnose the leaky bucket — lead volume, close rate, delivery time, or referral rate — and pick the one to fix this week.
Stay motivated when the season drags
Progress journaling, small wins, and the '10-more' rule for the week you want to quit.
Referral push in the last 30 days
Concentrated ask campaign, delivery-day script, and the mid-season 'who else' request that most preparers skip.
Maximize productivity in the final push
Cut low-value tasks, defer non-urgent admin, and the sprint plan for the final 30 days.
Finish the 90-day plan strong
Post-season review, off-season plan, next-year kickoff, and the retention playbook that starts the day you deliver.
Deduction & Credit Discovery
A systematic method for finding every deduction and credit a client legally qualifies for — so nothing gets left on the return.
The complete intake interview
The structured question set that surfaces income sources, dependents, life events, and expense categories most preparers miss on a rushed intake.
Life-event triggers
Marriage, divorce, new child, adoption, death of spouse, move, home purchase, retirement — each unlocks specific deductions or credits. The checklist to run every year.
Reading the prior-year return for missed items
Line-by-line review of last year's 1040, schedules, and worksheets to catch carryovers, unused credits, and items the previous preparer skipped.
Carryovers most preparers forget
Capital loss, NOL, charitable contribution, §179, passive activity, AMT credit, foreign tax credit, and QBI loss carryovers — where to find them and how to track them year over year.
Above-the-line deductions checklist
Educator expenses, HSA, self-employed health, SE tax half, SEP/SIMPLE/Solo-401(k), student loan interest, alimony (pre-2019), and jury duty pay repaid — the adjustments that reduce AGI directly.
Itemized deductions — every category
Medical (over threshold), SALT (cap-aware), mortgage interest, points, PMI, charity (cash + non-cash + mileage), casualty (federal disaster), and the miscellaneous items that survived TCJA.
Family & dependent credits
CTC, ODC, EITC, Child & Dependent Care, Adoption Credit, and Saver's Credit — eligibility rules, phaseouts, and the documentation that supports each one.
Education benefits — pick the best one
AOTC vs. LLC vs. tuition deduction vs. 529 vs. student loan interest — the ordering that produces the best legal outcome for the client's facts.
Energy & home credits
Residential Clean Energy Credit, Energy Efficient Home Improvement Credit, Clean Vehicle Credit (new + used), and EV charger — 2026 rules, dealer-transfer mechanics, and paperwork.
Retirement-related credits & deductions
Traditional IRA deduction, Backdoor Roth mechanics, Saver's Credit, QCD, SEP/SIMPLE/Solo-401(k) contribution timing, and Secure 2.0 tweaks preparers routinely miss.
Schedule C — the deductions clients never mention
Home office, business-use vehicle, cell phone, internet, subscriptions, continuing ed, meals (50%), banking fees, section 179, bonus depreciation, health insurance, and retirement — the interview that surfaces each.
Schedule E — rental deductions and losses
Depreciation, repairs vs. improvements, travel, mortgage interest, insurance, HOA, management fees, and the passive-loss + real-estate-professional rules for using losses.
State & local deductions and credits
State-specific credits (renters, property tax, EITC add-ons, 529, education, energy), city credits, and reciprocal-state issues — the ones out-of-state preparers overlook.
Low- and moderate-income credits
EITC (with and without children), ACTC, Premium Tax Credit reconciliation, Saver's Credit, and state EITC add-ons — the credit stack for working families.
Year-end moves for self-employed clients
Solo-401(k) vs. SEP, HSA, accountable plan, §179 timing, retro-active bonus depreciation, home office recapture avoidance, and prepaid expenses — before December 31.
AMT-friendly ordering
Which itemized deductions and credits survive AMT, which are added back, and how to order elections so a client doesn't lose the benefit at the AMT line.
Documentation that survives an audit
The substantiation rules for mileage, meals, charity (cash + non-cash), home office, business-use %, and dependents — what to collect at intake, not at exam.
The end-of-return review checklist
A final 30-item pass every return should get: verify every schedule, credit worksheet, carryover, and phaseout — plus the sanity checks that catch data-entry errors before e-file.
ERO Foundations: PTIN, EFIN & IRS Suitability
Everything the IRS expects from an Electronic Return Originator — from application through annual maintenance.
What is an ERO?
The role of an Electronic Return Originator under IRS Pub 3112, and how it differs from the preparer, transmitter, and Service Bureau.
PTIN vs EFIN vs ERO vs Service Bureau
Who needs each credential, who issues it, what it authorizes, and how the four roles stack together in a real office.
How to apply for an EFIN
Form 8633 / e-Services application walk-through: principals, responsible officials, business structure, and typical timeline.
IRS suitability checks
Credit history, tax compliance, criminal background, and prior non-compliance — what the IRS actually reviews before issuing an EFIN.
Fingerprinting requirements
IRS-authorized fingerprint vendors, who must be printed, and how to handle principals who are already credentialed (CPA, EA, attorney).
Maintaining EFIN compliance
Annual updates, address changes, adding principals, monitoring your EFIN in e-Services, and the Publication 3112 duties.
Why EFINs get suspended or revoked
The most common triggers: filing your own returns late, high reject rates, identity-theft indicators, security incidents, and preparer misconduct.
WISP & IRS security six
The written information security plan every ERO must maintain, plus the IRS Security Six requirements for protecting taxpayer data.
Working With a Service Bureau
How Service Bureaus, software resellers, and bank partners actually operate — and how a tax office chooses one without getting burned.
What is a Service Bureau?
The middle tier between software publishers and end-user tax offices: transmission, support, training, and bank-product access.
How Service Bureaus make money
Software licensing fees, per-return fees, bank-product splits, add-on products, and where each dollar in the stack comes from.
How tax offices partner with a Service Bureau
Onboarding flow: agreement, EFIN linking, bank enrollment, training, and the shared responsibilities during season.
Questions to ask before signing
Splits, fees, support hours, training, marketing support, exit terms, data ownership, and what happens to your clients if you leave.
Red flags when selecting a Service Bureau
Vague splits, undisclosed fees, pressure to inflate bank-product volume, exclusivity traps, and missing bank partner disclosures.
Reading the contract
The clauses that actually matter: split schedule, chargebacks, minimums, term/renewal, non-competes, and dispute resolution.
Reading Service Bureau reports
Production, volume, revenue, EFIN, office performance, funding, and reconciliation reports — what each field means and how to spot errors.
Back-End Fees: How Tax Offices Earn Bank-Product Revenue
The compliant, plain-English breakdown of how bank-product back-end revenue is generated, split, and paid — and how to reconcile it.
What back-end fees are
Revenue paid by a bank partner to the tax office / ERO when a taxpayer voluntarily selects a bank product. Not a fee charged to the taxpayer by the ERO — a share of the bank product fee.
How back-end revenue is generated
The taxpayer chooses a bank product, the bank charges a disclosed fee, and the bank remits a portion to the Service Bureau, which splits with the office.
Refund Transfers (RTs)
How a refund transfer works: temporary bank account, IRS funds the account, fees are deducted, and net refund is disbursed to the taxpayer.
Refund Advance Loans (RALs)
Bank-issued advance against an expected refund. Underwriting, disclosures, Regulation Z / TILA basics, and taxpayer eligibility.
Audit protection & identity-theft products
Optional add-ons the taxpayer may voluntarily select. Compliance rules on written disclosure, opt-in, and non-coercion.
Gross vs. net back-end revenue
Gross bank remittance vs. net after Service Bureau splits, tech fees, chargebacks, and returns — with a worked office-level example.
Revenue sharing: flat fee vs. percentage splits
Common structures (e.g., flat $X per funded RT, 50/50 or 70/30 percentage splits) and how to model each against your projected volume.
Payout schedules
Weekly, bi-weekly, monthly, and end-of-season true-ups. How to forecast cash flow around IRS funding waves.
Negotiating better splits (ethically)
Volume tiers, multi-year commitments, tech-fee reductions, and marketing co-op — leverage points a growing office can use.
Reconciling bank & Service Bureau reports
Match funded returns to commission reports, catch missing payouts, chargebacks, and reversals — with a sample reconciliation worksheet.
Identifying missing commissions
The five most common causes: unfunded RTs, returned checks, chargebacks for compliance issues, mid-season split changes, and reporting lag.
Mistakes that reduce back-end revenue
Failing to disclose bank products properly, low RT funding rates, high rejects, chargebacks from ID-theft, and non-compliant marketing.
Compliance & consumer disclosures
IRS Pub 1345, bank partner agreements, state regulations, and the mandatory taxpayer disclosures for every bank product.
Worked example: one return, top to bottom
A single Schedule EIC return with an RT and audit protection — track every dollar from taxpayer fee to office deposit.
Growing an ERO Office
Recruiting preparers, paying them compliantly, and scaling from one desk to multiple offices.
Recruiting preparers
Where to source seasonal talent, how to screen for PTIN + due-diligence discipline, and how to train new hires before Jan 15.
Commission structures
Per-return, percentage-of-prep-fee, tiered, and hybrid models — with a break-even analysis for each.
Employee vs. independent contractor
The 20-factor / ABC tests, why misclassification is the #1 audit exposure for tax offices, and how to structure each correctly.
Paying preparers compliantly
W-2 payroll, 1099-NEC, timing of commission true-ups, and holdbacks for chargebacks.
Office profitability model
Fixed vs. variable costs, break-even return count, and the revenue mix (prep fees + back-end) that a healthy office runs.
Scaling to multiple offices
Sub-EFINs, satellite locations, centralized review, brand standards, and the operational playbook multi-office owners use.
Seasonal staffing
Pre-season hiring calendar, mid-season surge coverage, and off-season retention of your top preparers.