Preparing the Personal Tax Return

This program allows the Tax Preparer to electronically store IRS documents in accordance with IRS Rev. Proc. 97-22. Please refer to that document for more information regarding the storage of electronic tax returns and other documents.

  1. Fill out the Taxpayer Questionnaire and have the Taxpayer sign the form verifying everything is true and correct. This questionnaire is available at the end of this User’s Guide and as a PDF in the Xlink19 directory for you to make copies.
  2. Check the Taxpayer’s Photo Identification and Social Security card to verify that the information matches the information on the Taxpayer Questionnaire.
  3. Begin the Tax Return and complete the Taxpayer Data sheet, along with the applicable Due Diligence questions. This program assists the Tax Preparer in fulfilling his or her federal requirements mandated in IRS Treasury Regulation § 1.66695-2. Complete any additional Due Diligence requirements of the state in which the Tax Preparer is operating or preparing returns.
  4. Print the Consent to Use and Privacy Notice forms and have the Taxpayer sign these forms. If there is a Spouse, he or she also needs to sign these forms. Alternatively, use the Signature Pad to capture the signature(s) on these forms. The electronically signed forms will be saved in the Document Archive as a permanent record of the Tax Return.
  5. Scan the Taxpayer Questionnaire, any additional Due Diligence Documentation, Photo Identification(s), Social Security card(s), and any other applicable identifications and documents to create a complete electronic copy of the return if this equipment is being utilized by your office. Otherwise, a hard copy of all of these documents should be kept as part of the Taxpayer’s tax return records.
  6. Continue preparing the Federal Tax Return.
  7. When the federal portion of the Return file is completed, verify the Return file and make any necessary corrections.
  8. Add State Return(s) if applicable and complete them. The State Return may be automatically added to the return if this option was selected during Setup. See Chapter 2 of the Manual.
  9. Verify the Return file again and make any necessary corrections.
  10. Queue the Return file for Transmitting or Transferring. See the Manual for more information on transmitting and transferring returns to and from Transmitting Computers, Non-Transmitting Computers, Remote Computers, and Central Site.
  11. Print the Consent to Disclosure and Bank Application and have the Taxpayer sign these forms if the Taxpayer is purchasing a Bank Product. Alternatively, use the Signature Pad to capture the Taxpayer’s Signature on these forms. The forms will then be signed and saved in the Document Archive as a permanent record of the Tax Return.
  12. Print the Form 8879 if the return is being electronically filed, and the ERO is using the Practitioner PIN method and/or auto-generating the Taxpayer’s PIN and have the Taxpayer sign this form. Alternatively, use the Signature Pad to capture the Taxpayer’s Signature and Tax Preparer’s signature on this form. This form will be signed and saved in the Document Archive as a permanent record of the Tax Return. Either a hard copy or an electronic copy of the signed Form 8879 must be kept as part of the Tax Preparer’s records.
  13. Print all applicable forms as follows:
    1. Taxpayer copy of the Federal and State Return
    2. Preparer copy of the Federal and State Return (if you keep hard copies)
    3. IRS copy of the return if the Federal Return is being mailed
    4. State copy of the return if State Return is being mailed
    5. Taxpayer copy of all applicable bank documents
    6. Preparer copy of all applicable bank documents (if you keep hard copies)
    7. Taxpayer copy of all other applicable product applications
    8. Payment voucher, if applicable
  14. If this is an electronically filed Return,
    1. If the Federal Return includes attachments that cannot be electronically filed, but instead must be mailed to the IRS, these attachments, along with a copy of Form 8879, will be printed with the Taxpayer’s return along with mailing directions.
    2. Do not mail the IRS any documents, including Form 8879, except under the conditions listed above.
  15. If this is a paper Return being mailed to the IRS and/or State,
    1. Have the Taxpayer sign the appropriate Return.
    2. Sign the appropriate Return if you are a Paid Preparer.
    3. Mail the appropriate Return along with any other required documents.
  16. On a regularly scheduled basis, from the Work In Progress Summary screen, click Transmit to send the electronically filed Return(s) from a Transmitting Computer and/or Remote Computer to Central Site and/or Main Office, or click Transfer from a Non-Transmitting Computer to send to an external storage device for Retrieving by a Transmitting Computer.
  17. Give the Taxpayer the following documents for his or her Records:
    1. A copy of the Federal Return, and any copies of State Returns, as applicable
    2. A signed Form 8879 if the Return has been filed electronically if requested
    3. A signed copy of the Bank Application, as applicable
    4. The Taxpayer’s (and Spouse’s) copy(ies) of their W-2s
    5. Any other documentation the Taxpayer brought with them for preparing the Tax Return
  18. As the Preparer, keep for your Records (as a hard copy or as an electronic copy):
    1. A copy of the Federal Tax Return, and any copies of State Returns, as applicable
    2. A signed Form 8879, if applicable, which must be kept for at least 3 years from the due date of the Federal Return or the filing date of the Return, whichever is later
    3. The top copy of the Bank Application
    4. The signed Taxpayer Questionnaire
    5. Any documents related to the Due Diligence Requirements
    6. The photocopies of all Social Security cards and Picture Identifications
    7. Signed Consent to Use, Consent to Disclosure, and Privacy Notice forms
    8. Copies of all W-2’s used to prepare the Tax Return