8 questions to ask about a tax outsourcing partner

Accounting

In today’s challenging economic climate, companies are increasingly asking their CPAs for ways to conserve cash, minimize taxes and bring more revenue to the bottom line. You’ve no doubt been asked by clients if they qualify for valuable tax credits for things like keeping employees on their payroll during COVID, or hiring disadvantaged workers, making their buildings more energy efficient, investing in certain types of research and development, or even if they can accelerate depreciation on certain components of their buildings or real estate assets.

While it’s tempting to say yes to high-margin advisory work, you may not be sure if a client qualifies, much less how to file correctly for the credit or incentive. While opportunities for tax savings can be substantial, the rules are complex and the penalties for filing incorrectly can be steep. 

Taxpayer penalties can include up to 25% of the taxes due for either failure to deposit or timely pay taxes. The taxpayer could also face a 20% accuracy penalty for substantially understating the tax due. Also, interest accrues on penalties, which adds to the taxpayer’s potential exposure. What’s more, if applicable, the tax preparer can be subject to preparer penalties — up to 75% of the income derived from the return — for understating the taxpayer’s liability. 

Finally, there’s the danger of missing out on valuable tax savings opportunities. For instance, many don’t realize that taxpayers can still qualify for the Employee Retention Tax Credit even though that provision expired in late 2021.

Bottom line: There’s no shortage of solution providers anxious to help you. Just make sure to do your homework on them first. You deserve a partner that will not only produce the best possible results for your clients but will reflect well on you as a CPA and reinforce your role as a trusted advisor.

Here are eight important questions to ask when choosing a partner to help you and your clients with specialized tax credit studies,

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