Moving to a new accountant is mostly paperwork done in the right order. Sign with the new firm before you give notice to the old one, hand over your prior returns and your books, put the new firm's IRS and Texas authorizations in place, and only then close out the old relationship.
The step you control least is getting records back from the old firm, so start that one early. Everything else depends on how organized your own files are.
Key Takeaways
- Sign the new firm's engagement letter before you give the old firm notice, so no filing is left without an owner.
- The new firm needs your recent returns, depreciation schedules, payroll filings and its own login to your accounting software.
- Filing a new IRS Form 8821 that isn't for a specific use automatically revokes the tax information authorizations already on file, unless you attach a copy of one you want to keep and check the line 5 box.
- Under the IRS's Form 2848 instructions, a power of attorney recorded on the CAF system generally revokes an earlier one recorded there for the same matter.
- Texas has its own Limited Power of Attorney for the Comptroller, Form 01-137, and it stays in effect until the end date written on it or until you revoke it in writing.
- Pecan Grove sits in Fort Bend County, so business personal property located there is rendered to the Fort Bend Central Appraisal District.
What does the move look like, step by step?
Seven steps, in this order. The order matters more than the speed.
- Choose the new firm and sign its engagement letter, which should say what it will do and from which tax year.
- Give the new firm what it needs to start: prior returns, depreciation schedules, payroll filings and access to your books.
- Sign the new firm's IRS authorization, and decide whether any of the old firm's should stay on file.
- Update your Texas Comptroller authorization if the old firm handled franchise tax or sales tax for you.
- Ask the old firm in writing for anything it still holds, plus a list of what it filed and what's still pending.
- Remove the old firm's logins from your bank, payroll and accounting software once the new firm has what it needs.
- Give the old firm notice under the terms of its engagement letter.
Signing with the new firm first avoids a gap. If you leave the old firm before anyone else has agreed to take the work, a quarterly payroll filing or an extended return can end up belonging to nobody. If you haven't decided whether to leave at all, when to switch CPAs covers that decision. This post assumes you have.
What records will the new accountant ask for?
Expect to be asked for your recent federal and state returns, the depreciation schedule behind them, payroll reports, any IRS or state letters you've received, and your books. The depreciation schedule matters most, because it carries forward from year to year and the next firm needs it to pick up where the last one stopped.
If you don't have copies of your returns, the IRS can fill some of the gap. Its Get Transcript page says your Individual Online Account lets you view, print or download transcripts, and that Form 4506 requests a photocopy of a return. For a business, the IRS Business Tax Account page lists tax transcripts among what an account shows, and lets you add people as Designated Users.
For your books, give the new firm its own user login in your accounting software rather than your password. That way you can remove one person later without locking everyone out.
What the old firm still holds is a separate request. If it's a Texas CPA firm, Texas rule 501.76 requires it to return the original records you gave it promptly, and no later than 10 business days after your request. Send that request in writing and keep a copy.
How do the IRS authorizations move over?
The new firm needs its own authorization, and signing it can end the old firm's without a separate letter. Which form you sign decides how that works.
Form 8821 lets someone see your tax information but not represent you. The Form 8821 instructions say that unless the form is for a specific use, the IRS will automatically revoke all prior tax information authorizations on file. To keep one, you attach a copy of it and check the line 5 box.
Form 2848 is the power of attorney that lets someone represent you. The Form 2848 instructions say that if the IRS records it on the CAF system, it will generally revoke any earlier power of attorney recorded there for the same matter. A specific-use form, or one not recorded on the CAF, only revokes an earlier one on file with the same office for the same matters. To keep an existing power of attorney, you check the line 6 box and attach a copy. The same instructions say filing a Form 2848 won't revoke a Form 8821 that's in effect, so if the old firm held an 8821, deal with it separately.
So if the new firm sends you one of these forms, read the retention box before you sign. Leaving it blank generally ends a matching authorization the old firm holds, within the limits above. Checking it keeps the old firm on file while it finishes something. If you're not sure what's still on file, revoke the old one in writing as well.
One authorization doesn't move at all. If the old preparer was named as the Third Party Designee on your personal return, the Form 1040 instructions say that authorization ends no later than the due date, not counting extensions, for filing the following year's return. For a 2025 return, that's April 15, 2027 for most people. On your next return, name the new firm or no one.
What changes with the Texas Comptroller?
If the old firm filed franchise tax or sales tax for you, it may hold a Texas power of attorney, which is separate from anything you signed for the IRS. The Comptroller's power of attorney forms page lists Form 01-137, the Limited Power of Attorney.
The Form 01-137 itself says it stays in effect until the end date written on it or until you revoke it in writing, and that if no end date is chosen, the Comptroller's office may act under it until it receives your written notice of revocation. Ask the old firm whether it filed one for your business. If it did, revoke it in writing and have the new firm file its own.
Does being in Pecan Grove change anything?
It decides where one filing goes. The Texas Almanac lists Pecan Grove as part of Fort Bend County, so business personal property located there is rendered to the Fort Bend Central Appraisal District. That means things like the furniture, equipment and inventory a business owns. The district's rendition guide puts the rendition due date at April 15 each year. When you switch, tell the new firm whether the old one filed your rendition, so next spring's isn't missed by both of them.
Our Pecan Grove page has more about the practice.
When is the best time to switch?
The best time is when nothing is due for a while. Switching in February or March means handing over files in the weeks before the April deadline, which is when a missing document costs the most.
An extension changes the timing too. The IRS extension page says an individual's extension request gives you until October 15 to file, and that any tax owed is still due by the April date. If your return is on extension when you switch, agree in writing which firm files it.
| Your situation | What to do | Why it matters |
|---|---|---|
| Nothing is due for a few months | Switch now and start with the next return | The new firm has time to read last year's file |
| A return is on extension | Agree in writing which firm files it | Two firms filing, or neither, is the risk |
| It's February or March | Settle who files this season before giving notice | Records arriving late can push a return past April |
| Returns are behind or an IRS letter arrived | Engage the new firm first and sign its Form 2848 | A representative can deal with the IRS for you |
What should you ask the new firm before you sign?
Ask who will actually prepare your return, who will review it, and who answers when you call or email with a question. Those can be three different people at any firm, and you're entitled to know before you sign rather than after.
Then ask what the engagement letter covers and what it leaves out, how the firm wants to receive your documents, and which tax year it starts with. Check the license too: the Texas State Board of Public Accountancy's Individual Licensee Search shows whether someone holds a Texas CPA license.
Where does Nguyen Accounting Group fit?
We're a CPA firm with our office at 12440 Emily Ct, Suite 303, in Sugar Land. The firm's services include tax return preparation, accounting and QuickBooks bookkeeping, tax resolution and fractional CFO work. The firm's founder, Thuy Nguyen, JD, CPA, is bilingual in English and Vietnamese.
If you're considering us, ask us the same questions in the section above. A firm you're about to trust with your records should be glad to answer them.
Talk to a CPA before you switch
A switch goes more smoothly when the new firm is in place before you give notice. If you're considering us as the new firm, Book Your 15-Minute Intro Call. We'll talk for 15 minutes and decide together whether we're the right firm for you.
