Handing client returns to an outside preparer is a big decision. The right partner adds capacity without adding risk. The wrong one creates rework, delays and data security problems. Here are eight questions to ask before you send the first return.
1. Which software do you work in?
The preparer should work directly in your tax software, whether that's CCH Axcess, UltraTax CS, ProConnect, ProSeries or another platform. Learning a new system on your clients' returns slows everyone down.
2. Which return types do you prepare?
Ask for specific experience with the returns you plan to send: 1040s with rentals and K-1s, 1065s, 1120-S, 1120 and 1041. Multi-state and pass-through experience matters if your clients need it.
3. How is client data protected?
Ask how files are accessed and stored, whether work is done in a secure hosted environment or on local machines, whether multi-factor authentication is required, and what happens to data when the engagement ends. Your firm also needs a written information security plan under the FTC Safeguards Rule, and your vendors are part of it.
4. Where is the work performed?
This matters for client consent. Under Section 7216, sharing 1040 client information with a preparer outside the United States requires the client's signed consent before the information is shared. Using a provider inside the U.S. doesn't require that consent. Ask where the preparers are located so you know whether consent forms belong in your engagement process.
5. Who reviews the work before it comes back?
A second set of eyes on every return before it reaches you saves review time. Ask whether returns are checked internally and what that review covers.
6. How do open items and questions work?
The best partners send you an organized list of missing items and questions, so your team decides what goes to the client. Ask how often you'll get updates during busy season.
7. Will you ever contact my clients?
The answer should be no. Your firm owns the client relationship. Get a non-solicitation commitment in writing.
8. Are there minimum hours or volume commitments?
Some providers require a guaranteed number of hours or returns. If your volume changes from season to season, look for a partner with no minimums.
Locus Point works in your software, under your letterhead, with daily updates and no minimum hours, and never solicits your clients. See how we work with CPA firms or book an intro call to ask us these questions directly.