Requirements Specification

Tax Practice AI

Backbone System

Scalable AI-Powered Tax Preparation Platform

Version 1.3 Draft • December 2025

Presentation Overview

Navigate by section based on your interests

1

Overview

Executive Summary • End-to-End Workflow

Slides 3–4

2

Implementation

Identity Verification • Timeline • Client Status • Next Steps

Slides 5–8

3

Technical Architecture

E-Filing • Compliance • Integrations • Infrastructure • AI

Slides 9–13

4

Business & Operations

SaaS Model • Additional Capabilities

Slides 14–15

Click a section to jump, or use arrow keys to navigate

OVERVIEW › Executive Summary

Executive Summary

WHAT WE'RE BUILDING

An AI-powered backbone system to support the complete tax preparation lifecycle — from client intake through e-filing and beyond.

KEY PRINCIPLE

AI-Assistive, Human-Controlled

AI provides analysis; licensed professionals make all final decisions

DESIGNED FOR

Small to mid-size accounting firms starting with a staff of 2, with architecture that scales as the practice grows.

DESIGN PRIORITIES

✓ Compliance-first architecture

✓ Accessibility for diverse clients

✓ Audit-ready from day one

OVERVIEW › End-to-End Workflow

End-to-End Workflow

1

PRE-ENGAGE

Conflict check
Engagement letter

2

INTAKE

Identity verify
Document upload
Missing doc requests

3

AI ANALYSIS

Extract data
Prelim review

4

PREP

Tax calculation
AI assistance

5

REVIEW

Accountant review
EA/CPA approval

6

DELIVER

E-sign
E-file

Document Intelligence

Auto-classify W-2s, 1099s, K-1s; extract data with AI

Interactive AI Assistant

Answer preparer questions; cite source documents

Client Communication

Secure portal messaging; email notifications

POST-FILING: Estimated tax tracking • Payment reminders • Extensions

PROGRESS TRACKING: Real-time % complete • Operator dashboard • Cycle time analytics

IMPLEMENTATION › Identity Verification

Identity Verification

Tiered approach balancing security with accessibility

1

TIER 1

Low Friction

Returning Clients

• Name + SSN-4 + DOB + Prior Year AGI

• Magic link to email on file

• One security question

⏱ Under 30 seconds

2

TIER 2

Moderate

New Clients

• Email verification

• Phone: SMS or voice call

• Government ID upload

• Persona analysis (90%+ auto-pass)

⏱ 2-3 minutes

3

TIER 3

High Risk

Verification Required

• Google Meet video call

• In-person office visit

• Notarized affidavit

TRIGGERS:

Refund >$5K to new bank • Score 70-89%

♿ Accessibility: Voice call alternative to SMS • Large text/high contrast • Paper mail fallback • "Call us" human help option

IMPLEMENTATION › Implementation Plan

Implementation Plan

Zero disruption to current operations • Target: January 2027 Filing Season

1

Discovery

Now - Jan 10 '26

• Answer 4 open questions (30 min)

• Gather sample docs & guidelines (1 hr)

• Workflow walkthrough (1 hr)

~3 hours total firm time

2

Development & QA

Jan - Apr '26

No firm interaction needed

Build during 2026 tax season

Firm focuses on 2025 returns

3

Integration Testing

May '26

4

Staff Orientation + UAT

Jun - Aug '26

• 2-hour orientation before testing

• Replay 2025 tax season scenarios

• Friends/family as test clients

5

Training & Soft Launch

Sep - Oct '26

6

Go-Live

Oct '26

First full season: Jan '27

Processing 2026 returns in production

IMPLEMENTATION › Client Input Status

Client Input Status

Key questions answered - ready to proceed with implementation planning

✓

Tax Software

UltraTax CS + SurePrep

Integration via SurePrep CS Connect

✓

Volume Projections

~1,000 returns/year

Projected 30% growth annually

✓

Entity Type Mix

Full spectrum coverage

Simple personal through complex business

?

State Coverage

Primary states served? Need all 50?

Pending confirmation

✓

Client Portal

SmartVault (existing)

Integrate, don't replace

Target: January 2027 Filing Season

Build during 2026 tax season • UAT with simulated 2025 returns • Go live January 2027

IMPLEMENTATION › Next Steps

Next Steps

1

Answer Follow-Up Questions

Tax software, volume projections, entity mix, state coverage

2

Review & Finalize Requirements

Update cost estimates, confirm scope, sign off on approach

3

Initiate Vendor Conversations

E-filing transmitter, Persona — start onboarding in parallel

4

Begin Development

Build during 2026 tax season, UAT after, go live Jan 2027

Questions? Let's discuss.

TECHNICAL ARCHITECTURE › E-Filing & Status Management

E-Filing & Status Management

Transmit

Form 8879 signed

→

Pending

Poll every 6 hrs

→

✓ Accepted

✗ Rejected

Rejection Categories

SSN/Name Mismatch Missing Forms Duplicate Filing Technical Error

Auto-Resolution

✓ Parse error codes • Apply fixes • Log for audit • Resubmit automatically

Recommended: Column Tax or April API — Modern REST APIs, webhook status, $2-4/return

TECHNICAL ARCHITECTURE › Compliance & Regulatory

Compliance & Regulatory

Built-in from day one, not bolted on later

IRS Requirements

Circular 230

Due diligence, preparer sign-off

WISP (Pub 4557)

Written Information Security Plan

PTIN Tracking

Expiration alerts, enforcement

Data Protection

GLBA Safeguards

Financial privacy, access controls

Encryption

AES-256 at rest, TLS 1.3 in transit

7-Year Retention

Automated lifecycle policies

Audit Trail

Complete Logging

All actions with timestamp/identity

Document Access

Who viewed what, when

AI Interactions

All queries/responses logged

TECHNICAL ARCHITECTURE › Third-Party Integrations

Third-Party Integrations

📊 UltraTax CS

Tax preparation software

Via SurePrep CS Connect

📄 SurePrep

OCR extraction, document processing

REST API integration

📁 SmartVault

Client portal, document storage

REST API integration

📤 E-Filing

Column Tax or April API

$2-4 per return

✍️ Google Workspace

E-signatures, Meet, Calendar, Drive

Existing license

🔐 Persona

ID verification, liveness check

$2-5 per verification

💳 Stripe

Credit card and ACH payments

2.9% card / 0.8% ACH

TECHNICAL ARCHITECTURE › Infrastructure & Scalability

Infrastructure & Scalability

AWS Multi-Region Architecture

PRIMARY: us-east-1

Application

ECS/EKS Auto-scale

Database

Aurora PostgreSQL

Documents

S3 + Glacier

AI/ML

Bedrock (Claude)

↓ Aurora Global DB + S3 CRR ↓

DR: us-west-2 (Warm Standby)

Apache Airflow (Self-Hosted)

Workflow orchestration for tax return processing, document extraction, batch jobs

EC2 t3.medium • ~$23/mo reserved

Tax Season Ready

System scales to 10x normal load during January-April peak

Aurora Serverless v2

Scales 0.5 → 128 ACUs on demand • Near-zero in off-season

Storage Lifecycle

Hot (0-1yr) → Warm (1-3yr) → Cold (3-7yr) → Archive (7+)

99.9% Uptime Target during tax season

Est. Infrastructure: ~$520/mo

$135 AWS + $385 third-party services

TECHNICAL ARCHITECTURE › AI Capabilities

AI Capabilities

Powered by Claude (Anthropic) via AWS Bedrock

📄 Document Extraction

W-2 1099s 1098 K-1 Brokerage

🔍 Preliminary Analysis

Compare YoY • Flag changes • Identify missing docs • Generate client questions

💬 Interactive Q&A

Answer preparer questions • Cite sources • Apply firm guidelines • Flag uncertainty

🧠 Modular Skills Framework

Version-controlled, updateable annually for tax law changes

💰 Cost-Optimized Model Tiers

Opus: Complex research Sonnet: Extraction, Q&A Haiku: Simple lookups

40-60% cost reduction vs single model

🌙 Batch Processing Mode

Flag items for overnight AI research

50% cost savings on batch jobs

🔒 Firm IP Protected

Guidelines never exposed to clients

BUSINESS & OPERATIONS › SaaS Business Model

SaaS Business Model

AI-powered tax practice platform delivered as a service

💡 The Model

We build and operate the platform. You subscribe as our first customer — getting enterprise-grade AI capabilities without the development cost or technical overhead.

Potential Pricing Models

1

Fixed Monthly Fee

Predictable cost, tiered by return volume

2

Percentage of Revenue

Aligns our success with yours

3

Per-Return Fee

Pay-as-you-go, scales with seasonal volume

✓ What You Get

• No upfront development cost

• Ongoing updates and improvements included

• Compliance and security managed for you

• Your data fully isolated and protected

🎯 First Customer Advantage

• Shape the product to your needs

• Preferred pricing as founding customer

• Direct input on roadmap priorities

Pricing TBD

We'll finalize pricing structure during Discovery phase

BUSINESS & OPERATIONS › Additional Capabilities

Additional Capabilities

Operational features for staff and clients

⚡ Rush Processing

Priority queue for expedited returns

24-hour / 48-hour turnaround at premium fee

📱 Mobile Access

Clients: Upload docs, check status, message

Staff: Review queues, add notes, get alerts

📦 Client Data Export

Complete package when client leaves

Documents, returns, history, AI summary

📬 Proactive Notifications

• Document receipt confirmation

• Missing document reminders

• Status change alerts

• Always includes "talk to human" option

🛡️ Exception Handling

All workflows have "Needs Review" fallback

Nothing falls through the cracks

📄 Expanded Document Formats

PDF Images DOCX XLSX/CSV