How to prepare a tax-preparer question list from unresolved bookkeeping items

When your books close with open items—uncleared transactions, uncategorized expenses, or balances you cannot explain—those loose ends should not simply roll into the next year. The most efficient way to resolve them is to prepare a written question list for your tax preparer before your return is filed. This article explains how to build that list from your actual records, item by item, so each question is specific, documented, and answerable.

Start with a reconciliation sweep

Before you can identify genuine questions, reconcile every account you can: bank accounts, credit cards, loans, and payroll liabilities. Unreconciled accounts hide the very items that generate preparer questions, so clearing what you can first narrows the list to real issues. As you reconcile, tag anything that will not clear: duplicate entries, transactions posted to the wrong period, deposits you cannot match to an invoice, or charges with no supporting document.

Create a simple spreadsheet with columns for the date, account, amount, description, and a short note on why the item is unresolved. This becomes the backbone of your question list. The IRS notes that supporting documents such as sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks contain the information you need to record in your books and support the entries on your tax return (IRS, What Kind of Records Should I Keep). If an item lacks that support, that fact itself belongs in your notes.

Categorize each unresolved item by type

Not every open item needs the preparer. Sort your flagged items into four buckets:

1. Documentation gaps — expenses or deposits missing proof of payment or source. These you may resolve yourself by locating canceled checks, credit card statements, or invoices; a combination of supporting documents may be needed to substantiate all elements of a purchase.
2. Classification questions — items you recorded but are unsure how to treat, such as whether a cost was a current expense or should be capitalized. The IRS distinguishes between costs you can deduct and costs you must capitalize, so this is a legitimate preparer question.
3. Balance discrepancies — loan balances, owner draws, or intercompany accounts that do not tie out.
4. Income questions — deposits of unclear origin, or forms such as 1099-MISC that do not match your records.

Only buckets two, three, and four typically go on the preparer list. Bucket one is your own cleanup work.

Write questions that are specific and evidence-based

A useful question names the account, the amount, the period, and what you have already done. Compare these:

• Weak: "Is this deductible?"
• Strong: "The $1,840 charge on the business card in March was for equipment repair; I have the invoice but not proof of payment. Should I treat it as a repair expense or capitalize it, and what documentation do you need?"

The strong version works because the burden of proof for entries, deductions, and statements on your tax returns rests on you—you must be able to prove certain elements of expenses to deduct them (IRS, Recordkeeping). Framing each question around what you can and cannot substantiate lets the preparer give a definitive answer instead of asking you for the same information back.

For classification questions, note which treatment you believe applies and why. For balance discrepancies, attach the trial balance, the loan statement, and your equity schedule. For income questions, list the deposit date, amount, and every customer or source you considered.

Attach a documentation packet to the list

Do not send questions without evidence. For each item, assemble the available records: bank statements covering the period, the general ledger detail for the account in question, invoices or receipts you located, and prior-year returns if the item carries over. Organize the packet by year and type of income or expense, the same orderly approach the IRS recommends for supporting documents.

If you use electronic accounting software, export the relevant reports rather than granting full access; preparers generally need the transaction detail and account balances, not your entire file. Label each attachment with the question number it supports so the preparer can move through the list without hunting.

Prioritize and set a response deadline

Rank your questions by impact on the return. Items affecting income or large deductions come first; small classification items come last. Send the list early enough in the filing process that answers can be implemented—ask your preparer directly when they need it, and build that date into your close calendar.

When answers come back, record the resolution in your books immediately: reclassify the transaction, add a memo, and attach the preparer's written answer to your records. Keep the full question list and resolutions with that year's file. Because the length of time you should keep a document depends on the action, expense, or event it records, and you must keep records as long as needed to prove income or deductions on a tax return, the resolved list is itself part of your substantiation file.

A disciplined question list turns year-end confusion into a short, documented conversation—and leaves your books cleaner going into the next cycle. If you would like help reviewing your unresolved items before tax season, contact KDM Accounting Services Inc..

Further reading

For related context, read Why Clean Books Make Tax Season Less Stressful.

For related context, read Why Owners Should Separate Personal and Business Finances Early.

Sources

• IRS: Business expenses
• IRS: Accounting periods and methods
• IRS: Qualified business income deduction