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Tax Return Testing for New Employees

tfreis
Level 2

Hello all! We are interviewing for a new EA/CPA with our small firm. As part of the interview process, we want the individual to prepare a mock 2021 tax return (we give them the source docs/organizer). However, we are running into candidates who do not have access to 2021 software. We do not want to give them our Proseries 2021 software because it requires using our license.....What strategies are others using to hire new employees and test their tax return prep/reviewing knowledge? Thanks for any input!

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23 Comments 23
IRonMaN
Level 15

Why are you stuck on the year 2021 instead of a more current year?

As a side note, if you really want to test their knowledge, have them complete a mock tax return manually. 😀


Slava Ukraini!
tfreis
Level 2

Good question! We are not so much "stuck" on 2021 as that is what redacted tax docs/organizer we have on hand from a previous recruitment in 2022.

 

As for doing a manual test, we would prefer the use of tax software, which is in line with what they can expect from this position. 

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BobKamman
Level 15

I'm sure there's some reason you can't just change 2021 to 2023 on the source documents.  I just can't think of it this early.  

tfreis
Level 2

I'm not concerned about the tax year we are using for our mock tax return test. The concern is finding software for candidates to use if they do not have access to a prior year. 

 

For other firms asking their candidates to create mock tax returns, what software are they having the candidates use, if not their own licensed ProSeries software? 

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George4Tacks
Level 15
Just-Lisa-Now-
Level 15
Level 15

I think what Bob was saying is give them the redacted 2021 info theyre going to use anyhow, then have them use the most recent software to prepare the return, they can pretend it says 2023 or 2024 on it..


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
tfreis
Level 2

Unfortunately, as someone else had shared in a link, all years 2019 to present are licensed and requires giving out our customer number. We could certainly do that and pretend like it is 2018 instead. Our EA is currently considering that as a backup plan. We were hoping other small tax firms have performed a similar mock tax return test with candidates and could share their experience. 

I did see there is a 2024 product that new customers can use to try out the ProSeries product before purchasing it. It is intended for selling the product and the candidate will end with calls from a sales rep....but that might be an option too 🙂

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tfreis
Level 2

Didn't mean to sound so snarky in my response! 2023 is still licensed so it's not a great workaround for us....but doing that same thing with 2018, which is no longer licensed is an option. I've presented that option to the owner to see what she wants to do.

We were hoping there was other software out there (doesn't have to be Intuit) that other small firms can recommend for our mock test. To be honest, we were really hoping our candidates had access to their OWN software they could use and not need us to provide them with software but that seems to be asking for a unicorn candidate 😞

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Accountant-Man
Level 13

Can they do it on site in your office?

** I'm still a champion... of the world! Even without The Lounge.
TaxGuyBill
Level 15

@tfreis wrote:

As for doing a manual test, we would prefer the use of tax software, which is in line with what they can expect from this position. 


 

This is only my opinion, so it may not be worth much, but ...

Unless you require previous knowledge of specific tax software (ProSeries), it seems more logical to me that you would want the potential employee to know how things should show up on the tax return.  Personally, I think having them manually fill out the forms would show A LOT more about how much they know about how to prepare a return, rather than just filling out screens in software.

I also wouldn't want to have the potential employee struggle with software they don't know during testing, and even more so, that they won't be even be using if you hire them.

Personally, I think having them manually fill out the forms makes more sense and will give you a better idea of how much they know.  But as I said, that is only my opinion.

BobKamman
Level 15

Are you looking for a data entry clerk, or someone who can work with clients and spot what documents are needed, not just process those that are provided?  Interviews are generally the least useful method to identify the best potential employees, so of course that's the system most organizations use.    If it's a public-facing job, though, it can be part of the process.

Your hiring assumption is that someone may be smart enough to pass the CPA or EA exam, but not smart enough to work for you?  And you still have competition for people who will go along with that attitude?  AI must have eliminated more jobs already, than we suspect.  

An applicant could have years of experience preparing hundreds of returns with one brand of software, but still struggle with Intuit quirks.  Or have experience with ProSeries, but also have dyslexia that no one has yet spotted.  The software doesn't tell you that the number is 736928, not 729638.  I did a Google search for dyslexia testing, and there are professionals who do that for a fee.  

Hiring employees is difficult.  My technique has always been, to rely on luck.  

sjrcpa
Level 15

Does your mock test have specific tricky things in it? Why not just ask how they would handle these?

Do you expect they know ProSeries already? "Testing" on 2018 software seems dumb. A lot has changed since then - both software and tax law. 

Do you think you will get applicants who would sit thru this test? Are you an H&R Block type shop? I think they test if you haven't been thru their course. (At least they used to).

What kind of employee would have their own tax software?


The more I know the more I don’t know.
Accountant-Man
Level 13

I'm old, but when using tax software began, the ability to understand the end result went away. I tried to teach that to my staff--what's the end result? If a return shows lots of tax due but only W2s and 1099-Rs, which should be withheld, then there is something wrong.

** I'm still a champion... of the world! Even without The Lounge.
BobKamman
Level 15

I’m old, too, and I can thank IRS for teaching me tax before putting me near a form to be filled out by pencil. I started out, after five weeks of class, taking about 100 calls a day at a toll-free site. We were issued Texas Instruments calculators, left locked in the charging cabinet overnight, that cost $80 each, equal to about $500 in 2025 dollars.

Later they gave me a staff job that included scheduling part-time taxpayer service representatives. The work could be done easily with a computer, but the government would take three years to approve purchase of a machine that would then be obsolete. So I bought a TRS-80 for $800, about the cost of an IBM typewriter that didn’t require such rigid approval, and showed them how to do it. For data storage it used a tape recorder. In today’s dollars the cost was about $4,200.

I left IRS after five years and bought a tax practice while going to law school. I used the computer, upgraded to use floppy disks, to write my own tax program. It’s really not that difficult, except for remembering all the steps when you do it only once a year. And multiple state returns are a challenge. So eventually I bought a commercial package. That was when you could run it on your own computer, not fill out sheets that were shipped off to be scanned for a mainframe.

Clients think I’m wonderful, believe it or not. I was always surprised when they came back year after year. Although, some of them compared me to their dentist. But I probably wouldn’t meet your hiring qualifications.

IRonMaN
Level 15

Thanks for the post Bob.  I learned something I never knew before.  I never realized they made Texas Instrument calculators back in 1932, but now I know they did.  😜


Slava Ukraini!
George4Tacks
Level 15

@BobKamman what was that first software? Curious George wants to know. Our first was a Burroughs Mini on lease with a CCH product and 3 part carbon paper copies on a line printer. That was after a few years of UPS to a service bureau - input sheets - send to bureau - want for return - make corrections - send to bureau - .... My first year was tax year 1975 working part time with some other teachers traveling out to people homes. One of the teacher's and a milk man did what you did and wrote there own program and used some computer that I can't remember (along with many other trivial facts.) We is likely very close to the same old(experience)ness


Answers are easy. Questions are hard!
BobKamman
Level 15

@George4Tacks The first software I bought was ATX, from the Willett brothers, I think it was known as Sabre or Max back then.  Eventually bought out by the Dutch.  Looking at the history, that didn't come out until the late 1990s.  Was I really wearing a programmer hat that long?  I must be really old. Much older than you.  Not as old as the guy running the country into the ground . . .

IRonMaN
Level 15

I graduated from college in 1979 and my first stop was a CPA firm with two locations.  It took me awhile before I learned that you really needed to roll up your sleeves at that time or you would continually come home with shirt sleeves black from pencil lead rubbing off while working.  We manually prepared returns with pencils and blank tax forms (along with plenty of erasers) and then the secretary got the fun job of typing them up so they would look pretty.  We then progressed to filling out forms for a company to do data entry of the tax return so we could get a pretty tax returns generated by a computer.  We were lucky because the wife of one of the CPAs in our other office worked for the data processing company and she would put our package on the top of her pile when it arrived.  Making a mistake was a pain since you would then have to correct the data and resubmit the return and wait for it to be mailed back.  Sometime in the mid to late 80s we moved on to the luxury of having our own software so that we could cut out the middle man and see the final product immediately instead of waiting for the mail.  In 1992 I started my own firm and was using a tax product that was subsequently bought out by Intuit.  We had the option of choosing Lacerte or ProSeries at that time and obviously I chose ProSeries.  So the moral of the story is, I still remember a little of what I'm doing when preparing a return as opposed to the new generation of tax preparers that know nothing about the basics of tax, but they know how to plug numbers into a computer. 😉


Slava Ukraini!
abctax55
Level 15

Jeff... it seems we are twins from a different mother.  MY story & timeline mimics your timeline 😉

And despite how well Lacerte handles most things and it's 'snifty' LKE input, I still - to this day - do the Form 8824 by pencil/paper and then just force Lacerte to match  (Hi Susan ... )

HumanKind... Be Both
IRonMaN
Level 15

But you keep missing the family reunions 😀


Slava Ukraini!
Accountant-Man
Level 13

So for my history, not trying to match Bob's:

1978 internship in NYC tax dept of a Second 7 national CPA firm, when I was in charge of changing the onion-skin pages of the loose-leaf tax books;

printing last minute tax forms on green lined computer paper and photocopying them with the plastic see through tax forms so the numbers appeared on the correct lines;

hand delivering returns to clients on Upper West Side on April 15;

turning down the audit job to go to law school(me, too!)

in the first real job, pencil on input sheets that were driven to Reagan Airport for flights to Texas, which were picked up the next AM by a colleague who lived near the airport;

rinse and repeat for errors;

THEN we got PCs.

** I'm still a champion... of the world! Even without The Lounge.
Accountant-Man
Level 13

My first software was in 1992. Parsons Personal Tax Edge cost $19 for unlimited 1040s and $19 for each state program. I had to calculate Keogh contributions by hand. I think 1997 taxes was first with PS.

They were bought by Intuit, and since I had already used Lacerte in other jobs, I chose Pro Series. ( I still laugh at Lacerte's -1 equals zero.)

** I'm still a champion... of the world! Even without The Lounge.
Jim-from-Ohio
Level 12
Level 12

@Accountant-Man almost exact same path I was on.. Parsons Personal Tax Edge (prepapres edtion).. i think it was $ 79.  At one point to efile we had to mail, ust U.S. mail a floppy disk to parsons with the tax file we wanted to efile and they would efile it based on the floppy disk file.  After that went with Intuit from my 1040s.. was with another company for business returns, which will go nameless. but had three letters for the name and that program had a meltdown in 2012 and moved even the business returns to ProSeries after that.