Today is the final day of tax season for extended returns. Many partners told me that the quality of the returns they were given to sign was not satisfactory, and they found many more errors than they considered acceptable. I think I have a reason, and a solution for the errors that got through to them.
There were many different types of errors, and the kind of errors do not matter for this discussion. What matters is that returns that were passed over to partners to sign had to be changed. Also, each return was already reviewed by a qualified and competent reviewer, so the errors are ascribed to a high-level knowledgeable team member. What caused these errors?
OK, let's be practical. Everyone will make an error occasionally. It happens. But a larger number of errors than reasonable is not acceptable, and that is what I am writing about. Tax managers and those who work above them passed on returns that were supposed to be "perfect" and ready to file but weren't.
Here are some of the typical reasons why, mainly due to responsibility and trust:
- The preparers are not trained properly and send unacceptable work to the reviewer to "fix" their errors. This causes excessive work by the reviewer, resulting in what I call "reviewer fatigue." The fault of the training lies with the practice's partners or owners.
- Reviewer fatigue puts the reviewer's focus on mainly making sure the data is input properly, rather than looking for opportunities to save the client on taxes through proper tax planning and financial planning arising from the return, and making sure there are no red flags that would cause an audit. What they are doing is extremely time-consuming and has them use their eyes, while the issues and planning uses their brains. Isn't a reviewer who uses their brain more valuable?
- Time pressure always causes rushing and shortcuts, which result in errors. Occasionally this can be alleviated through better planning and scheduling.
- The reviewer doesn't anticipate how the client would react to the results of the return, such as any surprising or unexpected results.
- Duplicated amounts that are entered on a completed tax return seem to occur more than they should. Even once is too much, but when they happen excessively with certain preparers and reviewers there is a systemic problem. One way of finding duplicate entries is for the reviewer to look at every page of the completed tax return. This simple step will uncover many more errors than you might imagine, including noticing an exact amount that might appear more than once. Try this easy, two-minute process and see what happens.
The above are some of the reasons for subpar returns reaching a partner's desk. I think the two main reasons are the lack of trust and the holding back of complete responsibility of the preparers for what they do, but certainly the reviewers have a very important role as well.
When complete trust or absolute responsibility is withheld, there is less focus, interest, attention or inner desire to do the best job possible and make sure the tax return is "perfect." This has to do with how the partner delegates and empowers the reviewer, or whomever is being supervised. While I place much of the blame on the partner, there needs to be a reviewer with an inner drive to do a "perfect" job. That inner drive, or ego, should prevent the reviewer from doing a less than perfect job. When it is lacking, the results are not pretty. A reviewer might be "good enough" as far as the partner or firm is concerned, but that's not what clients are paying for or expect to get or assume they are getting. In cases of failure to delegate trust and responsibility, I suggest the partners are "good enough" but not as good as they should be.
Either do it right or stop doing that type of work.
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