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What you need to set up Managed Returns for Accountants

Setting up a client in the Avalara Managed Returns for Accountants system requires gathering information so returns can be created to cover the countries, states, and local jurisdictions to which the client owes taxes. The tax strategy for a client is defined by the way they do business, where they do business, and the products or services they sell to their customers.

Use the following list to determine what information your firm should collect.

Company information

For each company, clients can find most of these items in the company's tax returns and business registration documents. This information should be gathered for each company in the client's account:

  • Legal company name
    The name the company uses on legal documents.
  • AvaTax account number / company ID
    For clients using AvaTax to do their tax calculations. After setting up the company in Managed Returns for Accountants, including this unique account number sends a request to the client to allow you to access their transaction data. Once the AvaTax client authorizes access, their transactions automatically upload into returns.
  • Taxpayer ID Number
    Also known as an Employer Identification Number (EIN). This number is created by the IRS. Contact the IRS Business and Specialty Tax Line to find the ID or have other questions answered about the company's Taxpayer ID Number.
  • Business ID Number
    If the company does business outside the U.S., they need a Business ID (BIN) number. This number is created by the governments in the countries where their business operates.
  • Company code
    This is a code used to identify each company. You need this code when importing transaction for clients that don't use AvaTax.
  • The company's primary address
    The physical address for the company's headquarters or main location.

Legal entity

It's necessary to identify the number of legal entities for the client; that is, which entities are required to file their own sales tax returns. While Avalara is not able to provide clients with advice on how to interpret specific state laws to design the client's tax strategy, your firm may be able to provide tax strategy advice using tax consultants. Advise your client as to your capabilities in this area.

  • Identify the number of legal entities for the client account.
  • Each legal entity is required to have a funding power of attorney (FPOA) provided to Avalara to activate the client. This is the responsibility of the firm to determine how many FPOAs are required from the client. Without the FPOAs, Avalara Treasury cannot debit the client's account for the tax liability.

Tax registration

The client registers to pay taxes wherever their company meets the registration and filing requirements. In the U.S., that means registering separately in states or territories (and in some cases, individual cities, counties, or parishes). Internationally, that means registering with each country, with special rules for countries like Canada, India, and Brazil. If they are not sure whether their company is required to pay taxes in a specific country or a U.S. state or territory, have them speak to your firm's tax professional.

When registering their company, the client should provide the following information:

  • What the company does (also known as business activity)
  • How much they expect to sell yearly
  • If they will be selling to other businesses or to consumers
  • If they will be using their company's legal name
  • If their company has ever been acquired by another company
  • Where the company does business, including physical locations, warehouses, sales personnel, and anywhere they sell products or provide services
  • Their company's ownership type (for example, sole proprietor, LLC, or profit corporation)
  • The names of the company's officers or owners 

Returns

Set up returns in cooperation with the client. This information is necessary to approve the client so their returns can be prepped and filed in all the states and local jurisdictions where they are required to file taxes. Having the client data in the Avalara system is not required to have the returns approved. For each return, collect the following:

  • Company name
  • Country 
  • Region (for example, state or province)
  • Form to be filed for the region for each return
  • Frequency
  • Effective from date
  • End date: expiration date to stop filing the return; if there is no end date, the return continues to be filed until the client asks for the return to be discontinued
  • EIN number
  • Filing method (for example, eFile)
  • Legal entity name (Note: For each legal entity, a funding power of attorney is required by Avalara before the client's return can be approved.)
  • Address (including city, country, region, postal code, and contact phone number)
  • Tax registration ID that the client received from the country, state, or local tax jurisdiction
  • eFile username and password (in applicable)
  • Prepay percentage (if applicable)
  • Banking information, including name, routing number, account type, and account number
  • Compliance contacts for dealing with state notifications that require an ad hoc filing power of attorney
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