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Started By
Message
Taxfyle. New Tax Prep Website for CPAs. Is it legit?
Posted on 1/19/16 at 12:53 pm
Posted on 1/19/16 at 12:53 pm
I'm a CPA that works in the private sector and I've been interested in starting up a side gig filing tax returns and doing bookkeeping.
Through some CPA directory email list I was apparently on, I got an email from Taxfyle (Website Link).
It looks interesting, but I couldn't find much through web searches due to this being the first tax season that they are active.
The website says that you can go through the people who have uploaded their tax documents and choose which you want to prepare. You will even know how much you will be paid before accepting a "client".
Has anyone heard of this company? Are their any risks I should consider before signing up and checking it out?
Through some CPA directory email list I was apparently on, I got an email from Taxfyle (Website Link).
It looks interesting, but I couldn't find much through web searches due to this being the first tax season that they are active.
The website says that you can go through the people who have uploaded their tax documents and choose which you want to prepare. You will even know how much you will be paid before accepting a "client".
Has anyone heard of this company? Are their any risks I should consider before signing up and checking it out?
This post was edited on 1/19/16 at 12:56 pm
4
Posted on 1/19/16 at 1:19 pm to SLafourche07
Ive done some design work through a similar platform. My biggest deal with it is that there is always someone willing to go lower.
Something I wouldn't touch for less than $1000 would go for $200, for instance.
Something I wouldn't touch for less than $1000 would go for $200, for instance.
Posted on 1/19/16 at 1:56 pm to SLafourche07
Never heard of it until now. Interesting concept. Looks like you need to sign up to get a lot of the information about how it works.
I see they are partnering with CCH, so I wonder if their tax software is basically a branded version of one of the lower level CCH cloud options like Taxwise.
You would need to buy software either through them or through somewhere else. It says you can take on 3 clients... is that at a time or throughout all of tax season? If you could turn them over pretty quickly, you could make some money working every night.
There is one thing I don't understand. On the client-facing side, it says the average return will cost $158 vs $223 industry average. On the CPA side, it says they will pay $75/hr vs industry average of $36/hr. I get technology, but that's a big swing.
I see they are partnering with CCH, so I wonder if their tax software is basically a branded version of one of the lower level CCH cloud options like Taxwise.
You would need to buy software either through them or through somewhere else. It says you can take on 3 clients... is that at a time or throughout all of tax season? If you could turn them over pretty quickly, you could make some money working every night.
There is one thing I don't understand. On the client-facing side, it says the average return will cost $158 vs $223 industry average. On the CPA side, it says they will pay $75/hr vs industry average of $36/hr. I get technology, but that's a big swing.
Posted on 1/19/16 at 2:45 pm to anc
I wouldn't touch that work. I'd have zero confidence that I was getting complete information from the customer, and I use customer rather than client intentionally.
Posted on 2/4/16 at 10:26 pm to LSUFanHouston
Gents, thank you for the interest and open discourse. I'm the co-founder and CEO of Taxfyle and would love to chime in.
CPAs aren't required to purchase the software, we make it available to only those that need it. Once signed up you can check out the dashboard and pick up any jobs you like, no obligations. You'll know exactly what type of forms are needed, if there is a state tax return required, the due date and how much you'll make. There is also a fully integrated and encrypted messaging system to improve efficiency and transparency.
Please feel free to visit taxfyle.com and click the chat button if you have any further questions. We look forward to disrupting this tax season!
CPAs aren't required to purchase the software, we make it available to only those that need it. Once signed up you can check out the dashboard and pick up any jobs you like, no obligations. You'll know exactly what type of forms are needed, if there is a state tax return required, the due date and how much you'll make. There is also a fully integrated and encrypted messaging system to improve efficiency and transparency.
Please feel free to visit taxfyle.com and click the chat button if you have any further questions. We look forward to disrupting this tax season!
Posted on 2/4/16 at 10:51 pm to rlavina1
Can tax attorneys with an accounting background join Taxfyle or is it limited to licensed CPAs only?
Posted on 2/5/16 at 9:53 am to Golfer2012
This is our inaugural year and our business model right now is exclusive to CPAs. However incorporating attorneys is something we have been considering and could be viable soon.
Posted on 2/5/16 at 4:20 pm to rlavina1
I personally think its an awesome idea. I think you should provide your preparers with some level of insurance and the take care of any preparer penalties resulting from misinformation from the "customer" as poodle says.
Posted on 2/5/16 at 4:21 pm to Poodlebrain
What are your concerns here poodle? Potential preparer penalties?
Posted on 2/5/16 at 10:56 pm to Jabstep
quote:My first would be potential disputes with customers. It is impossible to prepare these returns profitably without making certain assumptions based on professional judgment. What happens if one, or more, of those assumptions turns out to be incorrect?
What are your concerns here poodle? Potential preparer penalties?
In general you can rely on the information provided by clients without verifying the information, but there are still due diligence requirements in cases of inconsistent information and for specific items. Are you going to just accept client claims of amounts for meals and entertainment or business use of automobiles? How much substantiating evidence will you receive from people you only interact with over the internet, which will not be original document but reproductions? Do I get paid for reasonable due diligence?
Being the conduit in the filing of fraudulent returns by scam artists.
Divorced clients having disputes over who gets to claim which children as dependents in a given tax year. Second to file with the same child claimed gets their return rejected by the IRS. Do I get compensated for the work necessary to resolve the matter?
Posted on 2/6/16 at 12:11 am to Poodlebrain
I have a lot of these concerns as well.
Any CPA worth anything has certain requirements before he or she accepts a new client. One of mine is, before I decide to accept a new client, I must have a live interview/discussion with them. I want to look them in the eye, I want to ask them a bunch of questions - so I make sure to know what to suggest and also make sure I'm getting everything I need to properly serve the client. Several times a year, after an initial interview (which I never charge for), I've told a potential client that I would not be a good fit for them. I can tell which ones are going to cause me more trouble than it is worth, or the ones that are BS artists.
Now, I have done some of these initial interviews via Skype, but only for out of town potential clients, and only for potential clients that have been referred to me by a current client.
I'm not trying to place more value on my work than it deserves, but for a lot of people (maybe 70 percent of individuals), tax prep is a commodity. It's easy, it's quick, and and it is cheap. My clients are in the other 30 percent. There returns are not easy, not cheap, and I am in contact with them throughout the year.
To me, and I mean no disrespect to the founder who has posted on here, but this is sort of like a CPA buying a H&R Block franchise. It doesn't make a lot of sense to me.
I don't think this is a terrible idea, and I am sure there are some sole prac CPAs that have lots of $125 individual clients... and this might be a great thing for them.
Someone said this is like Uber for tax prep. I agree with that... but Uber is a commodity also. That's why it works so well. But tax prep isn't a commodity for everyone.
Any CPA worth anything has certain requirements before he or she accepts a new client. One of mine is, before I decide to accept a new client, I must have a live interview/discussion with them. I want to look them in the eye, I want to ask them a bunch of questions - so I make sure to know what to suggest and also make sure I'm getting everything I need to properly serve the client. Several times a year, after an initial interview (which I never charge for), I've told a potential client that I would not be a good fit for them. I can tell which ones are going to cause me more trouble than it is worth, or the ones that are BS artists.
Now, I have done some of these initial interviews via Skype, but only for out of town potential clients, and only for potential clients that have been referred to me by a current client.
I'm not trying to place more value on my work than it deserves, but for a lot of people (maybe 70 percent of individuals), tax prep is a commodity. It's easy, it's quick, and and it is cheap. My clients are in the other 30 percent. There returns are not easy, not cheap, and I am in contact with them throughout the year.
To me, and I mean no disrespect to the founder who has posted on here, but this is sort of like a CPA buying a H&R Block franchise. It doesn't make a lot of sense to me.
I don't think this is a terrible idea, and I am sure there are some sole prac CPAs that have lots of $125 individual clients... and this might be a great thing for them.
Someone said this is like Uber for tax prep. I agree with that... but Uber is a commodity also. That's why it works so well. But tax prep isn't a commodity for everyone.
Posted on 2/6/16 at 1:41 pm to Poodlebrain
Great points. I'd be more inclined participate if I were to be the preparer and not signer of the return. Have a CPA on staff that reviews and ultimately signs the return to shield the independent contractors from liability.
Posted on 2/8/16 at 3:40 pm to LSUFanHouston
Hi Guys,
We appreciate the insight as we aim to make the process of accepting and completing work as fluid as possible.
To LSUFanHouston's point, we are appealing to the market of individuals that view tax preparation as a commodity (the 70%). Our target market are millennials who in most cases have simple returns and don't require constant support or complex planning from a CPA. We are promising our clients convenient (through app) and quality services (CPA workforce) at a cheaper price than they would find at their local brick and mortar tax preparation office.
The CPA's are offered an opportunity to supplement their income without the effort of soliciting potential clients.
To address Poodlebrains concerns, any communication with the clients will need to be done through our in app messaging system. These communications are encrypted to ensure confidentiality of private information. Should any disputes arise between CPA and client/customer, we will make our records available to the necessary parties. This functionality supports the AICPA's SSTS No. 3, regarding due diligence. A member may in good faith rely, without verification, on information furnished by the taxpayer or third parties. If required to substantiate documentation for a reported deduction, a member should make appropriate inquiry through our app's chat feature in satisfaction of such condition. A prepares declaration on the tax return states that the information is true, correct, and complete to the best of the preparers knowledge, this does not require a member to examine or verify supporting data. Although a member holds certain responsibilities in exercising due diligence, the tax payer has the ultimate responsibility for the contents of the return. Our app makes use of a taxpayer’s returns for one or more prior years to help in preparing the current return. Reference to prior returns and discussion of prior-year tax determinations with the taxpayer should provide information to determine the taxpayer’s general tax status, avoid the omission or duplication of items, and afford a basis for the treatment of similar or related transactions.
We appreciate the insight as we aim to make the process of accepting and completing work as fluid as possible.
To LSUFanHouston's point, we are appealing to the market of individuals that view tax preparation as a commodity (the 70%). Our target market are millennials who in most cases have simple returns and don't require constant support or complex planning from a CPA. We are promising our clients convenient (through app) and quality services (CPA workforce) at a cheaper price than they would find at their local brick and mortar tax preparation office.
The CPA's are offered an opportunity to supplement their income without the effort of soliciting potential clients.
To address Poodlebrains concerns, any communication with the clients will need to be done through our in app messaging system. These communications are encrypted to ensure confidentiality of private information. Should any disputes arise between CPA and client/customer, we will make our records available to the necessary parties. This functionality supports the AICPA's SSTS No. 3, regarding due diligence. A member may in good faith rely, without verification, on information furnished by the taxpayer or third parties. If required to substantiate documentation for a reported deduction, a member should make appropriate inquiry through our app's chat feature in satisfaction of such condition. A prepares declaration on the tax return states that the information is true, correct, and complete to the best of the preparers knowledge, this does not require a member to examine or verify supporting data. Although a member holds certain responsibilities in exercising due diligence, the tax payer has the ultimate responsibility for the contents of the return. Our app makes use of a taxpayer’s returns for one or more prior years to help in preparing the current return. Reference to prior returns and discussion of prior-year tax determinations with the taxpayer should provide information to determine the taxpayer’s general tax status, avoid the omission or duplication of items, and afford a basis for the treatment of similar or related transactions.
Posted on 2/8/16 at 7:36 pm to rlavina1
Do you have a standard engagement letter? If so, would you provide a copy of the engagement letter?
Posted on 2/8/16 at 8:20 pm to rlavina1
1) So we are the CPA's signing the return?
2) We use our PTIN and EFIN?
3) Do you provide E&O insurance and cover the preparer for any liability resulting from the client?
4) What type of software are you using if the preparer uses taxfyle? Lacerte? Prosystem?
2) We use our PTIN and EFIN?
3) Do you provide E&O insurance and cover the preparer for any liability resulting from the client?
4) What type of software are you using if the preparer uses taxfyle? Lacerte? Prosystem?
Posted on 2/8/16 at 10:37 pm to rlavina1
Does this in-app communication system feature video/audio, or is it purely text/written communication?
As a professional, I would have difficulty signing a return without full control of the entire process. The fact that my communications can only take place via a protocol that is NOT of my choosing is pretty much a non-starter for me.
You have to understand, when we sign that return, every time we sign that return, our license and our good standing gets put on the line. You have to understand while the law says CPAs can rely on the client and not audit information, the IRS' pattern of imposing preparer penalties says otherwise.
While I think there is a lot of potential in your company, what your are offering is very much a subcontractor relationship. The taxpayer's relationship is to you, the Taxfyle company, not the CPA. As such, in most subcontractor relationships in the tax world, the subcontractor does not sign the return.
I would be happy to consider, under the current circumstances of your company, preparing the return as a subcontractor, with the understanding that the return will be reviewed and signed by a competent, licensed CPA that is an employee of your company. I understand and accept that I would be paid less than if I was signing the return, but to me, the additional compensation is not worth the additional risk of having to sign a return without full control of the process.
I wish you guys a lot of luck, and I hope you will report back to us after 4/18 and let us know candidly, as much as you can understanding confidentiality, how things went. The 70 percent you are going after, those who don't want to do online filing themselves, are stuck with the crappy chains, or worse, the fly by night here today, gone tomorrow hood shops that are just outright frauds.
As a professional, I would have difficulty signing a return without full control of the entire process. The fact that my communications can only take place via a protocol that is NOT of my choosing is pretty much a non-starter for me.
You have to understand, when we sign that return, every time we sign that return, our license and our good standing gets put on the line. You have to understand while the law says CPAs can rely on the client and not audit information, the IRS' pattern of imposing preparer penalties says otherwise.
While I think there is a lot of potential in your company, what your are offering is very much a subcontractor relationship. The taxpayer's relationship is to you, the Taxfyle company, not the CPA. As such, in most subcontractor relationships in the tax world, the subcontractor does not sign the return.
I would be happy to consider, under the current circumstances of your company, preparing the return as a subcontractor, with the understanding that the return will be reviewed and signed by a competent, licensed CPA that is an employee of your company. I understand and accept that I would be paid less than if I was signing the return, but to me, the additional compensation is not worth the additional risk of having to sign a return without full control of the process.
I wish you guys a lot of luck, and I hope you will report back to us after 4/18 and let us know candidly, as much as you can understanding confidentiality, how things went. The 70 percent you are going after, those who don't want to do online filing themselves, are stuck with the crappy chains, or worse, the fly by night here today, gone tomorrow hood shops that are just outright frauds.
This post was edited on 2/8/16 at 10:38 pm
Posted on 2/9/16 at 6:57 am to LSUFanHouston
quote:
While I think there is a lot of potential in your company, what your are offering is very much a subcontractor relationship. The taxpayer's relationship is to you, the Taxfyle company, not the CPA. As such, in most subcontractor relationships in the tax world, the subcontractor does not sign the return. I would be happy to consider, under the current circumstances of your company, preparing the return as a subcontractor, with the understanding that the return will be reviewed and signed by a competent, licensed CPA that is an employee of your company. I understand and accept that I would be paid less than if I was signing the return, but to me, the additional compensation is not worth the additional risk of having to sign a return without full control of the process.
This is basically what I posted. You are limiting your current pool of preparers with your current model because of the worries we all expressed. You do what I and LSUfan have just described you bring a large number of CPAs into the process and it will allow you to scale quickly. In most firms, only managers and above sign returns....and most CPAs leave public accounting prior to becoming a manager thus never signing a return. You eliminate that risk, and you've opened up the floodgates of qualified people that WILL sign up and participate. I just got out of public practice and am looking for exactly this. Regardless of your decision, I love the idea.
Posted on 2/9/16 at 1:02 pm to Jabstep
Hello everyone,
Wanted to make sure we address each of your points below:
Poodlebrain -
We don’t have a standard engagement letter, rather, we provide both CPA's and the clients with Terms of use. This is not something we can provide on this forum, however, if you sign up and complete registration as a CPA with Taxfyle, you will be privy to such information. Note that there is no cost for a CPA to sign up and register.
Jabstep -
1. Correct, you are the CPA's signing the return.
2. Correct, you will use your own PTIN and EFIN. When CPA's register, we request proof of EFIN and PTIN and use this in support of our background checks. We also request the CPA license number to confirm there is no disciplinary action on record for the CPA's we accept in the Taxfyle community.
3. At the moment we are not providing E&O insurance to cover the preparer. CPA's are expected to maintain their own insurance.
4. We encourage preparers to use whatever software they are most comfortable with, however, if a CPA doesn't have one of their own, we are partnered with Wolters Kluwer to sell Taxfyle software. Efiling is free for those using this software with our clients... efiling with your own software or with non Taxfyle clients (if you purchase our software) will cost $2 per return.
LSUFanHouston -
At the moment, all communication is through in app text. We do this to protect the innocent party should a conflict arise. It is difficult to monitor video/audio communications, while with text, we are better able to maintain records of all conversation between parties.
As a CPA myself, I understand the value of the license. We ensure that should a conflict arise, the terms of use signed by the client and the CPA will uphold the highest professional standards and protect the integrity of our members.
Taxfyle's goal to build a reputable brand in the accounting services industry. We hope to provide an opportunity for those with a professional license and a limited book of business of their own to join Taxfyle under the umbrella of quality service. This is a reputation that will have to be built through both our CPA's and terms. We understand that we are requesting CPA's to sign a return while they are only acting in a subcontractor role, however, we have tailored our terms to outline and protect the role each party is accepting. At the moment, an in house CPA that would review and sign all returns for engagements initiated by Taxfyle is not part of the business model.
We greatly appreciate the back and fourth as we are always looking for ways to increase our client and CPA pool. If interested, we would encourage you to signup and register as a CPA as it is no cost to you. If you are open to the opportunity and feel comfortable with the terms, this could be a lucrative relationship for those with professional certifications.
If you guys have anymore questions, please feel free to reach out on Taxfyle.com. We have 24/7 support available to answer any questions.
Thanks!
Wanted to make sure we address each of your points below:
Poodlebrain -
We don’t have a standard engagement letter, rather, we provide both CPA's and the clients with Terms of use. This is not something we can provide on this forum, however, if you sign up and complete registration as a CPA with Taxfyle, you will be privy to such information. Note that there is no cost for a CPA to sign up and register.
Jabstep -
1. Correct, you are the CPA's signing the return.
2. Correct, you will use your own PTIN and EFIN. When CPA's register, we request proof of EFIN and PTIN and use this in support of our background checks. We also request the CPA license number to confirm there is no disciplinary action on record for the CPA's we accept in the Taxfyle community.
3. At the moment we are not providing E&O insurance to cover the preparer. CPA's are expected to maintain their own insurance.
4. We encourage preparers to use whatever software they are most comfortable with, however, if a CPA doesn't have one of their own, we are partnered with Wolters Kluwer to sell Taxfyle software. Efiling is free for those using this software with our clients... efiling with your own software or with non Taxfyle clients (if you purchase our software) will cost $2 per return.
LSUFanHouston -
At the moment, all communication is through in app text. We do this to protect the innocent party should a conflict arise. It is difficult to monitor video/audio communications, while with text, we are better able to maintain records of all conversation between parties.
As a CPA myself, I understand the value of the license. We ensure that should a conflict arise, the terms of use signed by the client and the CPA will uphold the highest professional standards and protect the integrity of our members.
Taxfyle's goal to build a reputable brand in the accounting services industry. We hope to provide an opportunity for those with a professional license and a limited book of business of their own to join Taxfyle under the umbrella of quality service. This is a reputation that will have to be built through both our CPA's and terms. We understand that we are requesting CPA's to sign a return while they are only acting in a subcontractor role, however, we have tailored our terms to outline and protect the role each party is accepting. At the moment, an in house CPA that would review and sign all returns for engagements initiated by Taxfyle is not part of the business model.
We greatly appreciate the back and fourth as we are always looking for ways to increase our client and CPA pool. If interested, we would encourage you to signup and register as a CPA as it is no cost to you. If you are open to the opportunity and feel comfortable with the terms, this could be a lucrative relationship for those with professional certifications.
If you guys have anymore questions, please feel free to reach out on Taxfyle.com. We have 24/7 support available to answer any questions.
Thanks!
Posted on 2/9/16 at 2:02 pm to rlavina1
quote:
At the moment, an in house CPA that would review and sign all returns for engagements initiated by Taxfyle is not part of the business model.
I think this is going to limit you. Once you have this, the sky is the limit and I will be a preparer.
Posted on 8/2/18 at 3:26 pm to anc
Hi anc, I am considering utilizing TaxFyle. Have you actually used Taxfyle (or was it a similar platform?)
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