Tax season compresses a year of client work into a few weeks, and the failures are predictable: documents arrive late, returns reach review at the same time, extensions are decided on the last day and a return is e-filed with a wrong bank account number. A written workflow that every return follows turns the season from a rush into a pipeline. This article describes the stages and the controls at each one. The dates are in 2026 federal tax due dates and extensions, and the capacity side is in managing busy season in a small CPA firm.
Stage 1: Engagement and scoping
- Send an engagement letter to every client every year, listing the returns, the services and what is excluded. See audit engagement letter for the elements and pricing audit, review and tax engagements for scope and change orders.
- Run conflict and independence checks for new and continuing clients. See client acceptance and continuance.
- Confirm the preparer has the competence for the return types. Circular 230 section 10.35 requires the knowledge, skill, thoroughness and preparation the matter demands. See Circular 230 section 10.35 competence and delegation.
Stage 2: Organizer and document request
Send a prior-year-based organizer with a dated deadline for documents. Tell each client which documents arrive late by nature, such as Schedules K-1, brokerage statements and corrected forms, and agree what happens if they do not arrive by the deadline. Set a document cutoff date after which the client's return is eligible for an extension.
Stage 3: Intake and completeness
- Log each document on receipt, by client and date.
- Compare to the prior year to catch missing forms, such as a 1099 that arrived in the prior year and is missing now.
- Use a completeness checklist by return type: income documents, deduction support, estimated payments made, state returns and elections.
- Record open items and send a single consolidated request, not a stream of emails.
- Store documents in the secure portal only. See cybersecurity for CPA firms.
Stage 4: Preparation
Preparers work from the logged documents, record questions in the file and mark the source of every number. Prepare the return and the workpaper that supports the key positions. For business clients, tie the return to the financial statements and the book-tax differences. See book-tax differences and business tax returns 1065, 1120 and 1120-S. Check the elections and the planning items for the year, such as depreciation and the interest limitation. See section 179 and bonus depreciation and section 163(j).
Stage 5: Review
Review is the control that protects the firm. Use a checklist and a second person:
- Tie income to source documents and to the prior year, and explain differences.
- Check carryforwards: losses, credits, disallowed interest and suspended passive amounts.
- Check the entity returns against K-1 data passed to owners.
- Check the preparer's judgment items and research notes.
- Check disclosure and election statements.
- Confirm the preparer signature and PTIN requirements. See PTIN and tax return preparer penalties.
Record the review with a signature and date. Note review points in the file and show them cleared.
Stage 6: Client approval and signature authorization
Send the return with a summary of changes and open issues. Obtain the client's signature or signature authorization before e-filing. Publication 4557 advises making a final review of return information, especially direct deposit information, before e-filing. Add a final check of bank account and routing numbers, Social Security numbers and the mailing address as a hard step on the checklist.
Stage 7: E-file and acknowledgments
The IRS explains that a firm that e-files for clients applies to be an authorized e-file provider, and that return preparers who want to e-file for clients select the Electronic Return Originator option. The IRS sends an acceptance letter with the Electronic Filing Identification Number, or EFIN, once the application is approved. Approval can take up to 45 days from the date of submission. The IRS performs a suitability check that can include credit, tax compliance, criminal background and prior compliance with e-file requirements, and each principal and responsible official must be fingerprinted through an IRS-authorized vendor unless the person enters a professional status, such as attorney, CPA or enrolled agent. Plan the application well before the season.
After filing:
- Track acknowledgments, accepted or rejected, for every return.
- Clear rejections within a set number of days.
- Keep the e-file record with the return.
- Check the firm's e-file applications and PTIN accounts weekly for the number of returns filed under each EFIN and PTIN, and deactivate unused EFINs, as Publication 4557 recommends. Publication 4557 describes the weekly check as a way to flag abuse, so a total above the number of returns the firm filed should be reported to the IRS e-help Desk.
Stage 8: Extensions
Decide extensions by the document cutoff, not the deadline. File Form 7004 or Form 4868 with the e-file acknowledgment kept. Send each extended client a letter with an estimated balance due and the payment date, because the extension is only for filing the return and tax owed must be paid by the April filing date. See estimated tax payments.
Stage 9: Delivery and billing
Deliver the final return and a copy of the client's e-file authorization through the portal. Bill on completion under the engagement letter terms. Send reminders for the 2026 estimated tax installments at the same time.
Stage 10: Records and close-out
- Keep a complete file: documents, workpapers, review sign-off, authorization, acknowledgment and delivery proof.
- Return client records on request. Circular 230 section 10.28 requires a practitioner to promptly return client records necessary for the client to comply with federal tax obligations, and a fee dispute generally does not relieve that duty.
- Apply the firm's retention policy. See records retention and audit record retention.
- Run a post-season review: late documents, rework, write-offs, extensions, errors found in review, and what to change next season. See realization rates.
Tracking the pipeline
Keep one tracker with every return and its stage: engaged, organizer sent, documents complete, in preparation, in review, with client, filed, extended, delivered. Review it weekly in season. A return that sits in a stage past its target is a flag for the manager.
FAQ
When should the firm apply for an EFIN?
Well before the season. The IRS says approval can take up to 45 days from submission.
What is the most useful final check before e-filing?
Direct deposit and bank account information, per Publication 4557.
Does an extension extend payment?
No. The extension is only for filing the return.
CORAA prepares ready-to-review audit files for US CPA firms; see /us.
Sources
- IRS, Become an authorized e-file provider: https://www.irs.gov/tax-professionals/e-file-providers-partners/become-an-authorized-e-file-provider
- IRS, Publication 4557, Safeguarding Taxpayer Data: https://www.irs.gov/pub/irs-pdf/p4557.pdf
- IRS, Circular 230 (Treasury Department Circular No. 230), sections 10.28 and 10.35: https://www.irs.gov/pub/irs-pdf/pcir230.pdf
- IRS, Extension of time to file your tax return: https://www.irs.gov/filing/extension-of-time-to-file-your-tax-return
- IRS, Publication 509 (2026), Tax Calendars: https://www.irs.gov/publications/p509
Part of CORAA University · Tax and compliance for CPA firms: related guides, calculators and templates.
AU-C references are to AICPA Professional Standards, paraphrased here; read the standard itself before relying on a requirement. This page is guidance, not professional advice. Report an error