Tax Preparer Checklist for Clients

Standard Operating Procedure: Client Intake & Document Preparation Protocol for Pro Bono Tax Engagements

Document ID: SOP-TAX-PROBONO-042
Effective Date: October 24, 2023

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1. Document Control & Revision History

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2. Executive Summary & Scope

2.1 Purpose

This Standard Operating Procedure (SOP) defines the mandatory operational protocol for managing client document intake, verification, and preparation workflows within pro bono tax preparation programs (e.g., VITA, TCE, or corporate philanthropic tax clinics). Adherence ensures total compliance with Internal Revenue Service (IRS) regulations, Treasury Circular 230 standards, and institutional risk-mitigation frameworks.

2.2 Scope

This procedure applies to all personnel—including intake specialists, certified tax preparers, quality reviewers, and program administrators—handling taxpayer data, source documents, and return assembly under pro bono frameworks. It governs operations from initial client contact through final return execution and secure archival.

2.3 Regulatory Standards

All operations executed under this SOP must comply with:

• Internal Revenue Code (IRC) Section 7216 (Privacy/Disclosure of Tax Return Information).
• Gramm-Leach-Bliley Act (GLBA) Safeguards Rule for non-public personal information (NPI).
• IRS Publication 1075 (Tax Information Security Guidelines).
• Volunteer Income Tax Assistance (VITA) Program Quality Site Requirements (PQSR).

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3. Prerequisites & Tool Requirements

3.1 Hardware & Equipment

• AES-256 encrypted workstation or secure thin-client terminal.
• High-speed document scanner equipped with optical character recognition (OCR) and auto-feed capabilities.
• Dedicated privacy screen filters installed on all public-facing monitors.
• Secure multi-function printer with cryptographic erase hard drives.

3.2 Software & System Access

• IRS-approved tax preparation software (e.g., TaxSlayer Pro Online) with multi-factor authentication (MFA) enforced.
• Secure client portal software supporting end-to-end encryption in transit and at rest.
• Electronic fingerprint/signature capture pads compliant with ESIGN Act standards.

3.3 Certifications & Credentials

• IRS SPEC Certification at the Advanced, Military, International, or Puerto Rico level (as applicable to site scope).
• Annual completion of IRS Link & Learn Taxes certification modules, including Privacy, Ethics, and Intake/Interview training.
• Signed IRS Form 13615 (Volunteer Standards of Conduct Agreement).

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4. Roles & Responsibilities (RACI Matrix Table)

Legend: R = Responsible (Does the work), A = Accountable (Approves the work), C = Consulted (Provides input), I = Informed (Kept updated).

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5. Step-by-Step Operational Procedure

Phase 1: Identity Verification & Source Document Collection

• 1.1 Greet the client and verify physical government-issued photo identification (Passport, Driver’s License, State ID) for primary taxpayer and secondary taxpayer (if filing Married Filing Jointly).
• 1.2 Inspect Social Security Cards or Individual Taxpayer Identification Number (ITIN) assignment letters for every individual listed on the return (taxpayer, spouse, and dependents).
• 1.3 Collect and organize all income source documents (Forms W-2, 1099-NEC, 1099-INT, 1099-DIV, SSA-1099, etc.).
• 1.4 Collect and organize all deduction/credit documents (Forms 1098, 1098-T, childcare provider statements with EIN, charitable donation receipts, medical expense records).
• 1.5 Verify receipt of prior-year federal and state tax returns (strongly recommended for carryover loss and depreciation verification).

Phase 2: Intake Interview & Scope Triage

• 2.1 Administer and ensure complete execution of IRS Form 13614-C (Intake/Interview & Quality Review Sheet).
• 2.2 Conduct a verbal intake interview to confirm answers on Form 13614-C, probing specifically for omitted income streams (e.g., gig economy, cryptocurrency transactions, cancellation of debt).
• 2.3 Perform a scope check against VITA/TCE guidelines to screen out out-of-scope returns (e.g., complex Schedule C with net losses or employees, rental real estate without grouping elections, complex corporate/partnership filings).
• 2.4 Obtain signed consent via IRS Form 7216 if taxpayer data is to be utilized for secondary programmatic reporting or research.

Phase 3: Return Preparation & Data Validation

• 3.1 Input demographic data, filing statuses, and dependency exemptions into the tax preparation software, verifying SSNs/ITINs against physical cards.
• 3.2 Transcribe income items line-by-line from source documents into the software, ensuring exact matching of Employer ID Numbers (EINs) and Payer Tax IDs.
• 3.3 Enter adjustments, deductions, and credits, validating eligibility criteria (e.g., Earned Income Tax Credit (EITC) due diligence requirements, Child Tax Credit phase-outs).
• 3.4 Execute internal diagnostic software checks to identify missing fields, logic faults, or mathematical discrepancies.

Phase 4: Quality Review (The Second-Eyes Protocol)

• 4.1 Hand off the completed intake packet, source documents, and drafted return to an independent Certified Tax Preparer designated as Quality Reviewer.
• 4.2 Reviewer conducts 100% line-by-line verification of income entries against source documents.
• 4.3 Reviewer verifies identity documents and SSNs against the software input.
• 4.4 Reviewer validates EITC and other complex credit compliance checklists (Form 8867) where applicable.
• 4.5 Resolve any identified discrepancies with the preparer and client before proceeding.

Phase 5: Client Sign-Off & Electronic Filing Execution

• 5.1 Review the completed return line-by-line with the client, ensuring total comprehension of taxable income, withholding, refund, or balance due amounts.
• 5.2 Capture client signature on IRS Form 8879 (IRS e-file Signature Authorization) and state equivalents.
• 5.3 Transmit the federal and state returns electronically via the authorized software transmission pipeline.
• 5.4 Confirm receipt of electronic acknowledgment (ACK) from the IRS and state tax agencies within 24–48 hours.

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6. Quality Assurance & Verification Criteria

6.1 Audit Checklist

• Identity Match Verification: 100% match between physical IDs/SSN cards and software data entry fields.
• Form 13614-C Completeness: Every checkbox addressed; no blank required fields; mandatory signature present.
• EITC Compliance: Form 8867 fully completed with all due diligence interview questions satisfied.
• Source Document Reconciliation: Gross income reported on the return equals or exceeds the mathematical sum of all attached source documents.

6.2 Tolerance Thresholds & Acceptance Benchmarks

• Mathematical Error Rate: 0.0% tolerance. Any mathematical discrepancy found during quality review halts the process.
• Reject Resolution Time: Electronic filing rejects must be investigated, corrected, and re-transmitted within 3 business days of notification.
• Data Privacy Compliance: 0.0% tolerance for unencrypted transmission or improper physical storage of NPI.

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7. Practical Troubleshooting Scenarios

Scenario A: Missing Form W-2 or Income Source Document

• Trigger: Client presents year-end pay stub showing Year-to-Date (YTD) earnings, but the official Form W-2 has not been received from the employer by the filing deadline.
• Immediate Corrective Action Protocol:
  1. Advise the client to contact the employer directly or log into the employer payroll portal to download the official Form W-2.
  2. If the employer fails to provide the W-2 by the statutory deadline, assist the client in contacting the IRS toll-free assistance line to initiate a Form W-2 complaint.
  3. If filing cannot be delayed, utilize IRS Form 4852 (Substitute for Form W-2, Wage and Tax Statement) using the final pay stub figures, complete the required estimation justification, and attach it to the return.
  4. Note: Inform the client that utilizing Form 4852 may delay processing while the IRS cross-references the substitute data with employer submissions.

Scenario B: Dependent Claimed on Another Taxpayer's Return (Duplicate SSN Reject)

• Trigger: Electronic return is rejected by the IRS with Error Code F1040-515 (A dependent's SSN on the return has already been claimed on another tax return).
• Immediate Corrective Action Protocol:
  1. Immediately suspend processing and notify the Program Administrator and client via secure communication channels.
  2. Interview the client to establish legal custodial rights (e.g., divorce decree, primary residency duration, Form 8332 release of claim by custodial parent).
  3. If the client holds legal entitlement to claim the dependent, instruct the client to file a paper return. (The IRS will process paper returns and subsequently issue an audit/inquiry letter to both parties to resolve the conflicting claims).
  4. If the client determines they do not have legal entitlement, amend the return to remove the dependent, recalculate tax liability, and re-transmit.
  5. Document the incident in the site’s compliance log while strictly maintaining client confidentiality.