Step by Step Guide to the 1040 Tax Return Process

Workflow Status: NOT STARTED

Status used when the return was created but no work has started.
Electronic organizers will be sent to 1040 clients via HubSync Organizers. Paper organizers will be delivered if the Supervisor specifically requested this delivery option.
1. See the HubSync Organizers page for more information.
2. Note: For any return versions in CCH Axcess Tax that are not the final, filed version, the pro forma and organizer processing options must be turned off. See the “Using Multiple Versions of Tax Returns” section for instructions. Instructions related to using multiple versions of tax returns.

Workflow Status: INCOMPLETE – NOT READY

No Time Guideline (status depends on client providing missing information).

The Supervisor reviews client-uploaded documents in their HubSync 1040 Organizer.
If additional information is required before preparation can begin, change status in PE to INCOMPLETE – NOT READY and FORWARD to your desk.
When sufficient information has been received and the Supervisor determines preparation can begin, FORWARD to Tax Processing shelf with status SCANNING.

Workflow Status: SCANNING

Time Guideline: 1 day.

The Tax Processing Coordinator FORWARDS the PE job to their desk.
· All source documents are saved in the client’s DMS site under Items for Tax Return:
1. Paper documents received are scanned and uploaded.
2. Electronic documents from the HubSync Organizer are saved to the same folder.
3. If Client Service team member receives documents directly from the client via email or mail, create this folder and saved the documents down prior to sending to Tax Processing in SCANNING.
The Tax Processing Coordinator creates the SurePrep binder for the return and uploads documents into SurePrep. The Tax Processing Coordinator will sign off on the specific documents they upload. Excel files will need to be added by the preparer as Tax Processing Coordinators will NOT be adding those files.
The Tax Processing Coordinator will update the workflow status in PE to SP BINDER PROCESSING.

Workflow Status: SP BINDER PROCESSING

Time Guideline: 2 days (from completion of SCANNING). Please note: This is also dependent on number of pages in the SPBinder.

The Tax Processing Coordinator is responsible for ensuring the SurePrep binder successfully processed.
1. If an error occurs during binder processing, the Tax Processing Coordinator must identify and correct the issue before continuing. The Tax Processing Coordinator will escalate any issues to IT or the Supervisor if they are unable to resolve.
Once the binder is processed with no errors, the Tax Processing Coordinator will FORWARD the job to the Preparer or department shelf in PE and update the workflow status to PREPARATION.
For paper organizers, the Tax Processing Coordinator will FORWARD the job to the Supervisor/Manager and advance the workflow status to RECEIVED DOCUMENTS IN / QUICK ASSESSMENT NEEDED.

Workflow Status: RECEIVED DOCUMENTS IN / QUICK ASSESSMENT NEEDED

Time Guideline: 1 day

If the paper organizer is received with many source documents, we will skip this workflow status and FORWARD the job to the Preparer or department shelf in PE and update the workflow status to PREPARATION.

If the client submits a paper organizer with limited information, the 1040 Supervisor should review both the organizer package and the SurePrep binder to determine whether sufficient data is available to begin preparation.
1. Returns are routed to the Supervisor in the following order of priority:
  - Senior Associate → Manager → Director → Partner.
When sufficient information is available, FORWARD to the preparer or department shelf with status PREPARATION.
If additional information is needed:
1. Update status in PE to WAITING ON ADDITIONAL INFO and hold the return on your desk.
2. Send an open items list to the client and follow up until the information is provided.
3. Once additional documents are received, save them in the client’s Items for Tax Return folder in DMS. FORWARD to preparer or department shelf with status PREPARATION.

Workflow Status: EXTENSION PREPARATION

Time Guideline: 2 days.

The Preparer will prepare the extension and FORWARD job to themselves with workflow status of EXTENSION PREPARATION.
If a Supervisor review is required, the Preparer will FORWARD the job to the Supervisor and advance the workflow status to EXTENSION REVIEW.
The Preparer who finalizes the extension and prepares it for electronic delivery is responsible for updating the job status to ON EXTENSION.

Workflow Status: EXTENSION REVIEW

Time Guideline: 2 days

The Supervisor will complete a detailed review of the extension.
If review notes need to be cleared, the Supervisor will FORWARD the job back to the Preparer and advance the workflow status to EXTENSION PREPARATION. Comments to the Preparer should be left in the SPBinder. If a SPBinder does not exist, you will need to leave comments in Return Comments excel workpaper.
The Preparer who assembles the extension package is responsible for updating the job status to ON EXTENSION.
If the Supervisor prefers the Tax Processing team deliver the extension package to the Client workspace, please FORWARD the job to Tax Processing and advance the workflow status to PREPARE FOR DELIVERY. Please leave delivery instructions in PE on the delivery page Hold/Notes section, indicating that the instructions are for EXTENSIONS. Please note, the Tax Processing team will deliver the extension package saved in the 1000 section in DMS.
If there are paper deliverables that KSM needs to mail, please FORWARD the job to Tax Processing and advance the workflow status to PREPARE FOR DELIVERY. Please leave delivery instructions in PE on the delivery page Hold/Notes section, indicating that the instructions are for EXTENSIONS.

Workflow Status: PREPARE FOR DELIVERY

Time Guideline: 1 day

The Tax Processing team will handle the shipping or mailing of extension related documents as detailed in the delivery section in the PE job.
The Tax Processing team will FORWARD the job to Supervisor and advance the workflow status to ON EXTENSION.

Workflow Status: ON EXTENSION

No Time Guideline (status depends on client providing missing information).

This status indicates that the return is on extension.

Workflow Status: PREPARATION

Time Guideline: 5 days.

Shelf Returns:
1. A Preparer will pull the return according to their department’s shelf-monitoring procedures.
2. The Preparer will add their name to the Staff role and set themselves as the Primary on the job in PE (do not remove the “shelf” staff).
3. The Preparer will then FORWARD the job to themselves so that it shows on their My Desk.
Preparation Process:
1. Begin preparation of the tax return.
2. Review the Client’s Items for Tax Return folder in DMS for any unprocessed 1040 documents (documents without a signoff need added to SurePrep). Add all additional client data into the SurePrep binder.
3. If preparation cannot continue due to missing information:
  - Confirm with the Supervisor.
  - Change the workflow status in PE to WAITING ON ADDITIONAL INFO (this temporarily “stops the clock” on the 5-day guideline).
  - Resume once sufficient information has been received. Use professional judgment and Supervisor guidance as needed.
Completion of Preparation:
1. Update and complete the return.
2. Review using the KSM Way – Quick Check. Returns not meeting this standard will be returned to the Preparer immediately.
3. Update the delivery section in PE, ensuring delivery options and emails are selected. Add notes for the Tax Processing team as needed.
  - Examples:
    - Withholding documents (W2s, 1099s, etc): If there are multiple documents and not all of them need to be attached to a paper-filed return, you must note which documents go with that return.
    - Other returns to attach: Examples: Federal return, state returns to localities, locality returns to other localities, etc.
    - Miscellaneous attachments not attached in Axcess
Routing After Preparation:
1. No Supervisor/Tax Review required:
  - Complete the Finalization Process.
  - FORWARD to Signing Partner/Director → status SIGNATURE REVIEW. *The preparer must confirm with the signer whether they prefer to review a finalized copy (exported to CCH efile and printed for Client delivery) of the return or an accountant’s copy.
2. Supervisor Review required:
  - print to PDF directly out of CCH Axcess Tax.
  - Save the file in the client’s [Tax Year] document library in DMS.
  - FORWARD to Supervisor → status SUPERVISOR REVIEW.
3. Tax Review required (no Supervisor Review):
  - FORWARD to the Tax Department by choosing the applicable shelf → status TAX REVIEW.

Workflow Status: WAITING ON ADDITIONAL INFO

No Time Guideline (status depends on client providing missing information).

Any information received electronically should be added to the SurePrep binder (SPbinder).
Continue to send updated open items lists to the client and follow up regularly until all required information is received.
Once sufficient information has been provided, the Preparer or Reviewer will advance the return status in PE to the appropriate next step in the process.

Workflow Status: SUPERVISOR REVIEW

Time Guideline: 5 days.

The Supervisor will complete a detailed review using the guidelines in the Reviewer Responsibilities Document.
Focus on value-added review notes. Before writing a review note, ask:
1. Does it meet a professional standard?
2. Does it help the firm make money (add value)?
3. Does it help the client make money (add value)?
The Supervisor communicates changes noted in the Return Comments workpaper.
Gold Standard: Returns passed on to Tax or Signature Review must be technically and visually ready to deliver to a client. Any exceptions should be clearly noted as open items or preparer questions.
Review the delivery section in PE, ensuring delivery options and emails are selected. Add notes for the Tax Processing team as needed.
Routing after Supervisor Review:
1. If Supervisor notes must be cleared: FORWARD to Preparer → status CLEARING SUPERVISOR COMMENTS. The Supervisor is responsible for communicating to the Preparer the next steps of the return.
2. When all comments are cleared:
  - With Tax Review:
    - print to PDF directly out of CCH Axcess Tax.
    - Save in the client’s [Tax Year] document library in DMS.
    - FORWARD to Tax Department → status TAX REVIEW.
  - Without Tax Review: *The Supervisor must confirm with the signor whether they prefer to review a finalized copy (exported to CCH efile and printed for Client delivery) of the return or an accountant’s copy.
    - If ready for Partner review and directly on to Client delivery, complete the Finalization Process and FORWARD to Signing Partner/Director → status SIGNATURE REVIEW.
    - If ready for partner internal review only (and not Client delivery yet), FORWARD accountants copy with SIG in file name to Signing Partner/Director → status SIGNATURE REVIEW.

Workflow Status: CLEARING SUPERVISOR COMMENTS

Time Guideline: 1 day. All notes must be cleared within 1 day of being advanced from SUPERVISOR REVIEW.

If the preparer cannot address comments by the next business day (due to PTO or other commitments), they should inform the reviewer of the expected completion timeline (a Teams message is suffice)
Clearing Comments:
1. The Preparer is responsible for clearing all Supervisor review comments.
2. Each comment must be signed with a description of what was done to clear it.
3. If the Preparer is stuck or confused for more than 15 minutes, they must contact the Supervisor for assistance. In some cases, a peer could also help move through an issue.
After clearing comments, use the KSM Way – Quick Check to confirm the return is technically and visually ready for the client. Any exceptions should be noted as open items or preparer questions.
Once complete, print to PDF directly out of CCH Axcess Tax and save it in the client’s [Tax Year] document library in DMS.
Routing:
1. If the supervisor has indicated that they would like to review the return after the preparer has cleared the supervisor comments, the preparer should route the return back to the supervisor with the status SUPERVISOR REVIEW.
2. No Tax Review: *The Supervisor must confirm with the signor whether they prefer to review a finalized copy (exported to CCH efile and printed for Client delivery) of the return or an accountant’s copy.
  - If ready for Partner review and directly on to Client delivery, complete the Finalization Process and FORWARD to Signing Partner/Director → status SIGNATURE REVIEW.
  - If ready for partner internal review only (and not Client delivery yet), FORWARD accountants copy with SIG in file name to Signing Partner/Director → status SIGNATURE REVIEW.
3. Tax Review required: FORWARD to Tax Department → status TAX REVIEW.
  - Example: 1040 Returns, Tax Review Shelf.

Workflow Status: TAX REVIEW

Time Guideline: 3 days.

The Tax Department Reviewer will complete an issue-based review based on the issues identified in PE and linked in the comments in SurePrep.
- Federal Tax Review Criteria
Comments must be clear and documented.
1. For 1040s: Document comments in the SPbinder Notes using the note type KSM Tax Review.
2. For all other returns: Document comments in the Return Comments workpaper in DMS.
After review, the Reviewer will FORWARD the return to the Supervisor (unless the “Return To” role is filled out in PE) and advance the workflow status to CLEARING TAX COMMENTS.

Workflow Status: CLEARING TAX COMMENTS

Time Guideline: 1 day

The Supervisor determines if it is practical to have the Preparer to assist with clearing Tax Comments.
Each comment must have sign off with a description of what was done to clear it.
If the Preparer gets stuck clearing tax comments for more than 15 minutes, they must contact the Supervisor for assistance.
After clearing comments, the Preparer and Supervisor must use the KSM Way – Quick Check to ensure the return is technically and visually ready for the client. Any exceptions should be noted as open items or preparer questions.
When ready for partner review: *The Supervisor must confirm with the signor whether they prefer to review a finalized copy (exported to CCH efile and printed for Client delivery) of the return or an accountant’s copy.
1. If ready for Partner review and directly on to Client delivery, complete the Finalization Process and FORWARD to Signing Partner/Director → status SIGNATURE REVIEW.
2. If ready for partner internal review only (and not Client delivery yet), FORWARD accountants copy with SIG in file name to Signing Partner/Director → status SIGNATURE REVIEW.

Workflow Status: SALT REVIEW

Time Guideline: 3 days

This status is only used if a return is undergoing high level SALT review after Federal Tax Review has been completed. Note: Most 1040 state returns will not undergo a SALT review. Those that do are typically selected due to a specific issue or concern. Please be sure to clearly communicate the item or topic you would like the SALT team to review or provide input on.
1. If the return is in Federal Tax Review and SALT review simultaneously, do not use this status; keep the return in TAX REVIEW.
2. In such cases, complete the SALT Help Desk Request Form and indicate “State Return (SALT) Review” in the inquiry section.
The SALT Department Reviewer will complete a review of the state returns.
Comments must be clear and comprehensive.
1. Comments should be documented in SPBinder.
2. Any items requiring more in-depth explanation should be discussed directly with the Supervisor/Preparer to avoid delays.
The SALT Department Reviewer will FORWARD the return to the Supervisor (unless the Return To role is filled out in PE) and advance the workflow status to CLEARING SALT COMMENTS.

Workflow Status: CLEARING SALT COMMENTS

Time Guideline: 1 day

The Supervisor determines if it is practical to have the Preparer to assist with clearing SALT Comments.
If the Preparer is stuck for more than 15 minutes (or sooner if necessary), they must contact the Supervisor for assistance.
Each comment must have sign off with a description of what was done to clear it.
After clearing comments, the Preparer must use the KSM Way – Quick Check to ensure the return is technically and visually ready for the client. Any exceptions should be noted as open items or preparer questions.
When ready for partner review: *The Supervisor must confirm with the signor whether they prefer to review a finalized copy (exported to CCH efile and printed for Client delivery) of the return or an accountant’s copy.
1. If ready for Partner review and directly on to Client delivery, complete the Finalization Process and FORWARD to Signing Partner/Director → status SIGNATURE REVIEW.
2. If ready for partner internal review only (and not Client delivery yet), FORWARD accountants copy with SIG in file name to Signing Partner/Director → status SIGNATURE REVIEW.

Workflow Status: SIGNATURE REVIEW

Time Guideline: 3 days

The Signature Reviewer completes a high-level review using the Reviewer Responsibilities Document.
Comments should focus only on significant risk areas. Comments should focus only on significant risk areas. The Signature Reviewer should avoid re-performing prior review steps.
All comments must be documented in the SurePrep binder using the note type KSM_SIG Review. Items requiring more detail should be discussed directly with the Supervisor/Preparer.
Routing:
1. If there are comments to be addressed: FORWARD the job to the Supervisor/Preparer and advance the workflow status to CLEARING SIGNATURE COMMENTS.
2. If there are no changes:
  - If the return was Finalized (return barcoded in DMS and you reviewed Client copy) then sign off on all necessary documents in DMS. FORWARD the job to Tax Processing, and advance workflow status to SIGNED TO TAX PROCESSING.
  - If you reviewed accountants copy “SIG” version, FORWARD the job to the Supervisor/Preparer and advance the workflow status to CLEARING SIGNATURE COMMENTS. Leave a comment requesting they complete Finalization Process.

Workflow Status: CLEARING SIGNATURE COMMENTS

Time Guideline: 1 day. Returns must be reviewed within 1 day of being advanced from SIGNATURE REVIEW.

The Supervisor/Preparer is responsible for clearing all Signature Review comments.
1. Each comment must have sign off with a description of what was done to clear it.
2. If the Supervisor/Preparer is stuck or confused for more than 15 minutes (or sooner if necessary), they must contact the Signature Reviewer for assistance.
After clearing all comments, FORWARD back to Signing Partner/Director → status SIGNATURE REVIEW, after completing the Finalization Process .

Workflow Status: SIGNED TO TAX PROCESSING

Time Guideline: 1 day.

Electronic Delivery:
1. The Tax Processing Team will process and deliver returns through HubSync.
2. The Tax Processing Team is responsible for returning any client paper documents stored in the file room within 24 hours of delivering the tax return.
3. Once processed, the Tax Processing Team will FORWARD job to TAX PROCESSING, COMPLETED and advance the status to DELIVERED – WAITING ON 8879 or DELIVERED – PAPER FILED.
Paper Delivery:
1. The Tax Processing Team will process, print, and assemble all paper-delivered documents.
2. The Tax Processing Team is responsible for printing and applying all mailing labels.
3. If the delivery address differs from the tax return address, the Preparer must provide this in PE under Delivery Information.
4. After delivery, the Tax Processing Team will FORWARD job to TAX PROCESSING, COMPLETED and advance the workflow status to DELIVERED – PAPER FILED, DELIVERED – WAITING ON 8879, or FORWARD job to ADMIN HOLD and advance workflow status to HOLD FOR DELIVERY.
General Rules:
1. The default delivery option for Client copies is electronic delivery.
2. Preparers are responsible for exporting returns from CCH Axcess.
3. The Tax Processing Team will assemble the printed tax return in the correct format for client delivery.
4. The Preparer is responsible for attaching any necessary documents in CCH Axcess or providing special instructions in PE under Delivery Information.

Workflow Status: HOLD FOR DELIVERY

No Time Guideline (dependent on receiving additional returns to deliver).

Once a complete group of returns has been received by Tax Processing, they will follow the delivery instructions provided in Practice Engine (PE).
The Tax Processing Team will do one of the following:
1. If any part of a return is to be e-filed, advance the workflow status for each such return in the group to DELIVERED – WAITING ON 8879 and complete the delivery process to the client.
2. If a return is to be entirely paper-filed, advance the workflow status to DELIVERED – PAPER FILED and complete the delivery process to the client.

Workflow Status: DELIVERED – WAITING ON 8879

Time Guideline: 5 days.

The Client Service person is responsible for contacting clients if Form 8879s are not returned within 5 days of delivery, however Tax Support Coordinators will also be reaching out for missing Form 8879s. Please reach out to your Tax Support Coordinator for help with specific clients if needed.
If delivered via HubSync, clients will also receive automated email reminders.
Signed 8879s that are returned through HubSync will be automatically routed within PE to an 8879 Processor. Please note that although this process is automated, there is still a short delay while the automation runs.
Signed 8879s received by other methods (drop-off, mail, direct email, etc.) must be forwarded to form8879@ksmcpa.com.
1. The 8879 Processor will manually confirm that the form is properly signed and that the return is ready to release. Please note that because manual confirmation is required, there will be a delay in e-filing. The length of the delay will vary depending on the time of year.
Once processed, the workflow status will advance automatically to 8879 RECEIVED.

Workflow Status: DELIVERED – PAPER FILED

Return is considered complete at this status, and no further action is required.

Workflow Status: 8879 RECEIVED

Time Guideline: 1 day.

The Tax Support Team will complete the back-end release of the return to the IRS.
Supervisors/preparers must monitor the e-file process by opening Axcess, selecting “EF Status,” and searching for their client.

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Supervisors/Preparers must also monitor their jobs in PE to ensure no returns are stalled or unfiled.
The workflow status will automatically advance to IRS ACCEPTED once CCH confirms acceptance.

Workflow Status: TRANSMITTED

The return has been transmitted to the IRS and is awaiting acceptance.

Workflow Status: IRS REJECTED

The federal e-file has been rejected.

Workflow Status: IRS ACCEPTED

Return is considered complete at this status, and no further action is necessary. The job in PE will automatically close and roll forward 8 days after reaching this status.

The Tax Support Team releases returns to the IRS. Expect occasional delays while automation is verified or manual releases are processed. Check e-filing status in Axcess (“EF Status”) before reaching out to the Help Desk.