02/12/2025
To ensure smooth and efficient tax preparation, here’s a step-by-step guide on how a return moves through the system from start to finish.
1️⃣ Preparing & Submitting the Return
• Collect all necessary client documents (W-2, 1099, deductions, credits, ID, etc.).
• Enter data accurately into our tax software.
• Review for errors, missing information, and compliance.
• Have the client sign the 8879 form (E-file authorization).
• Submit the return electronically to the IRS/state.
2️⃣ Return Status: Pending → Accepted/Rejected
• Once submitted, the return goes into a Pending status.
• The IRS reviews the return and either accepts or rejects it:
• ✅ Accepted – The IRS has received the return and will begin processing.
• ❌ Rejected – There is an issue (e.g., incorrect SSN, AGI mismatch). Corrections must be made and resubmitted.
3️⃣ Processing the Return
• The IRS verifies income, deductions, and credits.
• If any discrepancies arise, the IRS may request additional verification or issue a review/audit.
• Most refunds are processed within 7-21 days unless flagged for review.
4️⃣ Refund Approved & Disbursed
• Once the IRS completes its review, the refund status updates to Approved.
• Funds are scheduled for direct deposit or mailed check.
• Clients can track their refund at Where’s My Refund? (IRS website).
5️⃣ Possible Delays & Issues
• PATH Act Hold (EITC/ACTC) – Returns with Earned Income Credit (EITC) or Additional Child Tax Credit (ACTC) are held until mid-February.
• ID Verification – Some clients may receive a 5071C letter requiring identity verification.
• Offset/Debt Collection – If a client owes debts (e.g., student loans, child support), the IRS may apply the refund toward those balances.
6️⃣ Finalizing & Providing Support
• Once funds are received, ensure the client has no further questions.
• Offer financial guidance on how to use refunds wisely (savings, investments, business funding).
• Provide post-filing support if they receive letters or need amendments.
