Quality Review Is Mandatory

1. Module NJ 1.32 Quality Review IsMandatory What? Why? How? Who? NJ Training TY 2008

2. Quality Review Summary • A MUST for ALL tax returns including PTRs • NO EXCEPTIONS • Need 3 or more counselors at each site • Requires verification • Filing status and eligibility as a dependent • Input data from all source documents • Key information is not overlooked • Compare with prior year return (if available) • QR must be by a 2nd Certified counselor • For paper returns, effectively re-do the return

3. Significant Issues and Problems • Strict adherence to “NJ Can Do/Cannot Do List” • Proper handling of tax exempt interest and dividends • Failure to include taxable NJ Property Tax Refunds (Homestead Rebate and PTR) on Federal Return • Accurate completion of Schedule C-EZ, Business Income • Accurate completion of questions on EIC Worksheet • Failure to complete of NJ IRA Worksheet(s) to ensure inclusion of all IRA Distributions in NJ1040 • Reporting rent and/or property tax on • NJ Property Tax deduction or credit worksheet and/or • NJ1040 Rebate application for tenants • Accurate preparation of NJ and NY Returns for NJ Residents with NY W-2s • Carry forward of proper amounts of Taxable NY Income & NY Tax Liability to the appropriate NJ form

4. Common Errors • Incorrect data entry of : • Names Addresses • DOB SSN • Filing status and dependency determination • Entry errors from W-2 and/or 1099 information • Either in income & tax withholdings • Missing or incorrect EIN and Payer ID • Improper completion of EIC Worksheet • Improper entry of RRB-1099R • Entry of 1099-OID as tax exempt NJ Training TY 2008

5. TOP TEN PROBLEMSUSING TAXWISE Improper OVERRIDES! Improper use of punctuation Incorrect entry of last name – spouse/dependents Not linking to 1099MISC from Sch C-EZ Use of scratch pad when existing worksheet or schedule

6. TOP TEN PROBLEMSUSING TAXWISE Adding new form when already existing form Not recreating e-file as last item before exiting return – thus creating an invalid e-file No or incorrect state adjustment for interest and dividends Improper completion of Sch EIC worksheet Zero cost basis for capital gains Failure to input medical expense and real estate taxes on Federal Schedule A (Need for NJ return)

7. 1st Steps In QR Process • Run Diagnostics • e-file errors • Identify overrides – Why/Impact On Return • Review Forms Tree • Any RED exclamation points(!!!) • If so, determine if there is any significant missing data and/or potential impact on accuracy of return NJ Training TY 2008

8. Taxpayer Information Verification • Name: taxpayer, spouse and dependents • Address • SSN • Date of Birth • Must Match IRS Master File NJ Training TY 2008

9. Source Documents • Compare all source documents with data input • This can be done different ways • Review of data on monitor • Use print out of input documents • Review completed return • Manual Returns – Add total income and withholdings on W-2s, 1099s and compare to tax return NJ Training TY 2008

10. Paper Returns In effect, redo the return! • Check all footings and calculations • Calculations on Schedules & Worksheets if applicable • Schedule D Capital Gains and Losses • Simplified Method for determining taxable pension amount • Social Security Worksheet for determining amount taxable • Tax Liability check amount to • Tax table, or • Qualified Dividend and Capital Gain Tax Worksheet • Tax Credit forms NJ Training TY 2008

11. Who? • Quality Review requires a “second set of eyes.” It cannot be done by the counselor who prepared the return • Must be a certified counselor • The taxpayer CAN NOT be the “second set of eyes” NJ Training TY 2008

12. How? • Locations with several tax preparers (Larger Sites) • One person is designated to do QR • Same person may also be responsible for helping TP prepare Intake Sheet • Can rotate this position periodically • Locations with fewer tax preparers (Smaller Sites) • Designate one person to do QR, if practical, rotate periodically OR • Preparers exchange returns with other preparers • Requires at least 2 preparers at every site & for Shut-In Returns NJ Training TY 2008