What is a Service Bureau?

A Tax Software Service Bureau is a company that provides business services for a fee. You may ask yourself how Service Bureau fits into the Retail Tax Preparation Industry. The service bureau business model is one of the little-known secrets in the Tax Industry. As a result, very few people openly discuss the benefits of being your service bureau and what it is.

Simply put, a service bureau provides tax software, Training, and ongoing support to tax professionals. If you already own a tax office or are in the tax industry, creating your own Service Bureau brand is one of the most lucrative business models in the industry.

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3 ways Service Bureaus generate income

There are multiple revenue sources that Service Bureaus can tap into within the tax industry. Typically generate revenue off of each bank product funded within their Service Bureau.

Service Bureau Fee:

You may have software currently through a service bureau or have seen a line item in your software for Service Bureau Fees. In most cases, this is how the service bureau earns money. For example, every time you or your office file a bank product tax return, that fee is debited from your customers’ refund and paid to your service bureau.

The biggest misconception regarding Service Bureau Fees is that the SB Fee is something the tax preparer is charging and earning, which is not true in most cases. Instead, the revenue generated from Service Bureau Fees is getting paid to the Service Bureaus.

Tax Software:

Service Bureaus usually have Co-Branded software, Which means that the software they have is custom to their Tax Business brand. With their Co-Branded software, they can re-sell to tax preparers, tax business owners, and even other tax professionals looking for tax software. They also have the freedom to sell the licenses to use their software for whatever price they want and charge yearly renewal fees for those licenses.

Revenue Splits:

Revenue Splits are a big revenue generator for Service Bureaus who choose to offer them. A Revenue Split is where the Service Bureau makes a percentage of all tax preparation fees charged by the preparer for the services provided to the preparer by the Service Bureau. This Revenue Split is separate from the Service Bureau fee. The most common Revenue Splits are 70/30, 80/20, or 90/10, with the smaller percentage going to the Service Bureau. Usually, with the Revenue Split option, the Service Bureau provides additional services other than software sales. For example, software training for the preparer and staff of the Tax Business, assistance with marketing, and ongoing support.

In short, If you are a seasoned tax professional looking to grow your business and revenue or want to get out of the tax preparation side of the business, then starting your own Service Bureau might be the right move for you.


  • There has been a 114% increased growth in the past 20 years of women entrepreneurs running businesses. Still in the US only 4 out of 10 business are Women-Owned. Women are making moves in the right direction at an historic speed.
  • In 2019 women started a net total of around 1,821 new businesses every single day. 64% of those businesses were by women of color. So, the biggest growth in Women-Run Business was made up by the majority of women of color taking the leap in starting Small Businesses.
  • Those Small Businesses started weren’t just casual side hustles or borderline hobbies. There are statistics that show 62% of Women Entrepreneurs Businesses are their primary source of income. Women are taking a chance and putting in the work to ensure their small businesses are a success.
  • Most women don’t even apply or look for business financing. Only 25% of women apply for any type of business financing in comparison to the 33% of men who do. Women also ask for an average of $77,000 while men ask for an average of $109,600.
  •  Forbes shared that women-founded companies in the venture capital firm First Round Capital’s portfolio outperformed those founded by men by 63%. Women are out here doing things in a big way in the venture backed space, considering that only a mere 7% of venture funds were given to Women-Owned Startup’s.
  • Though it may be hard for Women-Owned businesses to be approved for conventional loans, 57.4% of SBA Microloan Program Loans were given to Women-Owned or Women-Led Businesses.
  • Women-Owned Businesses added half a million jobs in the US between 1997 and 2007. If women start and continue to support each other through education and resources, they could add even more jobs increasing prosperity and helping the economy.

NEW 2021 REJECT CODE: F8962-070

This is the IRS’ top reject so far across the country, across all software vendors. Please disseminate this to your staff as you see fit.

  • This reject occurs when the IRS database has record of any SSN on the return receiving an advance payment.
    • Taxpayer, spouse, dependent.
  • Even if they received an advance payment for just one month, the 8962 is required.
  • Providers have until January 31st to mail the 1095-A to taxpayers, so many have not received theirs yet.
  • If they dispute the need for the 8962, the return will be processed by hand, which will result in significant delays, usually 3-6 months.
  • History also tells us the IRS tends to bypass the bank products on many of these hand processed returns. They simply mail a check to the taxpayer.
  • We are still awaiting guidance from the IRS about attaching a PDF for dispute/calculations.

This website has a great deal of useful information on the subject:



Ready for your 2021 tax refund? Mark your calendars because January 24 is the date the Internal Revenue Service will start accepting and processing 2021 income tax returns.

The 2022 tax season will start from Monday, January 24, and end on Monday, April 18, the Treasury Department and Internal Revenue Service said Monday — but brace yourself for potentially sluggish service as the unfunded and backlogged IRS juggles another filing season, Treasury officials said.

“Planning for the nation’s filing season process is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare,” said IRS Commissioner Chuck Rettig. “The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don’t face processing delays. Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year. And we urge extra attention to those who received an Economic Impact Payment or an advance Child Tax Credit last year. People should make sure they report the correct amount on their tax return to avoid delays.”

The IRS encourages everyone to have all the information they need in hand to make sure they file a complete and accurate return. Having an accurate tax return can avoid processing delays, refund delays, and later IRS notices. This is especially important for people who received advance Child Tax Credit payments or Economic Impact Payments (American Rescue Plan stimulus payments) in 2021; they will need the amounts of these payments when preparing their tax returns. The IRS is mailing special letters to recipients, and they can also check amounts received on IRS.gov.

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