Fix the Mistakes Before the Call: Automate Tax Return Reviews with AI
Even the most experienced tax professionals know that reviewing a completed return is one of the most critical steps in the tax preparation process. But no matter how thorough you are, small mistakes can slip through. That’s where AI-powered tax prep tools like TruePrep serve as an invaluable third set of eyes to catch errors before they become problems.
AI-powered tax prep tools act as an extra layer of oversight during the review process, automatically highlighting year-over-year changes, identifying outliers, and flagging patterns that don’t align with client history. This helps catch mistakes early, improving accuracy, reducing rework, and boosting client confidence.
Why Return Reviews Are Critical — But Challenging
Once a tax return is prepared, it typically goes through two levels of review, internal review and partner review. While this process works well in theory, human error is inevitable — especially during busy season. Common issues can slip through:
Missed deductions or credits
Data mismatches (e.g., income reported differently across forms
Misclassified income or expenses
Significant changes from last year’s return that don’t align with client activity
Manual reviews take time and focus, and even the most experienced accountants can miss subtle issues — leading to client questions, amended returns, or IRS notices.
Use TruePrep as Your Third Set of Eyes
1. Automated Year-Over-Year Comparison
TruePrep’s AI tools automatically generate a side-by-side comparison of year-over-year changes, identifying outliers and patterns that don’t align with client history — saving time on manual reviews.
For example, if a client’s rental income drops from $25,000 to $5,000 year-over-year, TruePrep will flag it as a potential discrepancy and suggest confirming with the client. TruePrep also evaluates filing scenarios (e.g., Married Filing Jointly vs. Separately) and recommends the most beneficial strategy.
If a client with fluctuating income might benefit from switching filing statuses, TruePrep will suggest the most advantageous option to maximize refunds.
2. Error and Compliance Detection
TruePrep reduces filing errors and penalties by cross-checking returns with source documents and applying consistency checks. It also ensures compliance with the latest IRS and state tax regulations.
If a client’s Form 1099 shows $75,000 in reported income but the return reflects only $50,000, TruePrep will flag the discrepancy and suggest verifying the reporting source. Or if a client’s HSA contribution exceeds the IRS cap, TruePrep will flag it and recommend adjusting the amount to avoid penalties.
3. Audit Risk Assessment
TruePrep helps CPAs assess audit risk by flagging areas that may trigger IRS scrutiny, such as large business expenses or questionable deductions. If a client claims a home office expense that’s disproportionately high compared to their business income, TruePrep will flag it to confirm it meets IRS safe harbor requirements. This reduces the risk of triggering an audit by ensuring consistent and logical filing patterns.
4. Final Review Summary for Partners
TruePrep generates a structured review summary for partner sign-off, highlighting key changes, flagged issues, and suggested adjustments. If a client’s deductions increase significantly due to medical expenses, TruePrep will flag it and recommend verifying receipts before finalizing the return. This improves communication between preparer and partner, streamlining the final sign-off process.
Example Review Summary
Subject: 2024 Tax Return Review Summary – [Client Name]
Hi [Partner Name],
Attached is the 2024 tax return for [Client Name]. Below is a summary of key changes, flagged issues, and recommended adjustments:
Summary of Changes:
Income increased from $85,000 in 2023 to $92,000 in 2024, primarily due to stock options exercised.
Deductions decreased by $2,000 due to lower mortgage interest payments.
Flagged Issues:
The client claimed the Child Tax Credit last year but not this year — TruePrep recommends confirming eligibility.
Unusual spike in charitable contributions — TruePrep suggests verifying donation receipts.
Suggested Fixes:
Confirm whether the client still qualifies for the Child Tax Credit.
Verify receipts for charitable contributions.
Next Steps:
If no issues are found, proceed with finalizing the return.
Reach out to the client for clarification if needed.
Best,
[Your Name]
Stop Leaving Money on the Table — Let AI Do the Heavy Lifting
Reviewing returns manually is time-consuming — and even experienced accountants can miss details. TruePrep automates this process, comparing year-over-year changes, identifying inconsistencies, and flagging potential issues before the return is finalized.
For more insights on enhancing your tax preparation process, read more here: How To Avoid In-Person Meetings This Tax Season
You can also start your free trial today and see how automation can transform your firm’s workflows.