How to Achieve a No Touch Tax Return
In early 2019 in the United Kingdom, Her Majesty’s Revenue and Customs (HMRC) launched the Making Tax Digital (MTD) initiative, an ambitious plan to transform tax administration so it is more effective, more efficient, and easier for taxpayers to get their tax filings right. The stated goal is for the HMRC to become “one of the most digitally advanced tax administrations in the world.” In fact, filing taxes in many other countries is not a very labor-intensive process. According to the Tax Policy Center, at last count 36 countries permit return-free filing for some taxpayers. For some, it’s as simple as clicking a button to confirm a return prepared by the government.
Of course, the complexity of the U.S. tax code makes such seamless tax compliance difficult, especially for business returns, and there will always be taxpayers with complicated tax situations that necessitate the help of a professional.
Still, the reality of a ‘no touch’ tax return is closer than you think. The technology available today can help your firm and your clients get closer to that ideal.
What is a ‘No Touch’ Tax Return?
A ‘no touch’ tax return means every step of the tax preparation and compliance process is digital and automated — from obtaining client data to sending the completed tax return to the client. This isn’t science fiction — it’s possible with readily available technologies. Consider the labor-intensive, repetitive tasks the professionals in your tax department complete.
- Gathering and validating client data
- Running reports
- Calculating and entering adjusting journal entries
- Grouping client balances for entry into the tax return
- Manually entering data into workpapers and returns
- Printing multiple copies of the return for review and assembly
If these time-consuming tasks were automated, you can see the potential to transform the way your tax practice operates.
A number of readily available technologies make this possible, including robotic process automation and machine learning, among others.
Robotic Process Automation (RPA) is the use of software to automate high-volume, repetitive tasks. Machine learning refers to the science around teaching computers to progressively improve their performance on a task. Unlike RPA, which is logical and condition-oriented, machine learning requires the computer to have some degree of cognitive capability. The computer is trained to detect data patterns or relationships that will then help it draw conclusions. With RPA and machine learning, it’s possible for tax professionals to rely on technology to replicate routine, predictable tasks and free up time to focus on more high-value work.
Missing the form below?
To see the form, you will need to change your cookie settings. Click the button below to update your preferences to accept all cookies. For more information, please review our Privacy & Cookie Notice.