How to switch CPAs for your business or nonprofit

Mid-year, or right after a return is filed, is the easiest time to switch. Your new CPA has room to review prior returns, set up schedules and get authorizations in place before the next deadline. Switching close to a due date can still work; it just may mean filing an extension while records come together.

• Prior three years of returns: federal and state, with all schedules and K-1s.
• Depreciation and amortization schedules: asset lists with dates placed in service, methods and prior deductions.
• Carryovers: net operating losses, credits, charitable contribution carryovers and capital losses.
• Owner records: S corporation shareholder basis, partnership capital accounts and loans to or from owners.
• Payroll filings: quarterly and annual federal and state payroll returns, W-2s and 1099s.
• Notices and correspondence: any open IRS or state notices, payment plans or elections such as an S election acceptance letter.
• For nonprofits: prior Forms 990, the IRS determination letter, audited or reviewed financial statements and state registration filings.

Form 8821 lets a person or firm you choose inspect and receive your confidential tax information for the tax types and years listed. It does not allow representation.

Form 2848 is a power of attorney. It authorizes an eligible representative, such as a CPA, attorney or enrolled agent, to represent you before the IRS. For a corporation, an officer with authority to bind the corporation signs it.

With either form on file, your CPA can request IRS transcripts that show returns filed, payments posted and any balances. States have their own authorization forms, and we prepare those too.

Sometimes a preparer retires, a firm closes, or an online bookkeeping or tax service stops supporting your account. When records are hard to get, rebuild from sources you control:

1. IRS transcripts. A business can view transcripts in its IRS business tax account, request them with Form 4506-T, or have an authorized CPA request them.
2. State accounts. State tax agency online accounts show filed returns and payments.
3. Bank and payroll records. Bank statements and payroll provider reports support income, expenses and wages.
4. Owner returns. Prior K-1s on owners’ personal returns show what the business reported.

Export whatever data you can from any software before access ends, including the general ledger, fixed asset list and payroll history.

We send a short checklist, set up the IRS and state authorizations, pull transcripts and review your prior returns before we start the current year. If something in a prior year needs attention, we explain it and your options plainly. Our fees are transparent and fair, quoted upfront, in writing.