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11660: Protection Plus - Definition and Software Setup


Protection Plus

What is Protection Plus? How do I set it up in the software?
 

What is Protection Plus?

Protection Plus is a third-party company offering audit protection and identity theft restoration services. Protection Plus has been protecting taxpayers for over 15 years and is the industry expert in dealing with IRS and State issues of all kinds. 

Protection Plus provides the following benefits:

  • Audit Assistance - Protection Plus can assist with almost any letter a taxpayer receives from the IRS or State about their individual tax return. Protection Plus case resolution specialists are full time employees and have an EA and/or CPA designation. Some common tax issues that Protection Plus assists with are:
    • Assistance with denied credits such as EIC, Child, and Education Credits.
    • Assistance with Schedules A, C, and E
    • Tax debt resolution services including Offer in Compromise, installment agreements, tax penalty abatement, wage garnishment relief, and innocent spouse relief.
  • $2,500 Preparation Guarantee - Up to the first $2,500 is paid by Protection Plus if a legitimate preparer error is made on the return, covering taxes, penalties, and interest. This does not cover fraud, negligence, or taxpayer errors.
  • Identity Theft Restoration - Protection Plus members are provided with a full year of complete ID Theft Restoration services. This benefit covers the entire family (spouse and dependents under 18) for identity theft incidents across all areas of their life. All work done on member’s behalf is performed by qualified Privacy Advocates and includes the following services:
    • Daily credit monitoring for 6 months following an incident,
    • Notification of local authorities, financial institutions, and credit bureaus. 

See the video How to use Audit Protection Plus for a demonstration and additional information on signing up to offer Protection Plus with the standard program. 

How do I register for Protection Plus?

To select your program and enroll, go to the Drake Support website

  • Navigate to Products > Audit Assistance.
  • Select which program you want to offer: Protection Plus Standard or Protection Plus Firm Level, select Apply, and complete the remaining fields.
    • In order to agree to the user agreement and submit the application, an ERO must click on the blue User Agreement link, scroll through the document, and then click close.

Fee and other information is available on the enrollment screen. More information is available on the Protection Plus website.

A bank product is not necessary to use Protection Plus Standard. The product cost, $44.95, and any markups are deducted from the bank product in a return, if there is one. Otherwise, you recover it as part of your bill and, under your agreement with Protection Plus, you are responsible for paying them for the product. The Company can view their clients who have enrolled in Tax Protection Plus by logging into their account at www.taxprotectionplus.com.

If you choose the Protection Plus Firm Level program you must complete ACH information and keep a valid payment method on file for the auto-draft of fees. There is no integration with bank products for the Firm Level. Per the application, Tax Protection Plus LLC will debit a total of $10.00 from the Company’s bank account provided for every individual tax return that is e-filed by the Company. Protection Plus will bill the tax office every other week during tax season. After tax season, billing will be done monthly. 

What are the Protection Plus programs?

Protection Plus has two programs for an ERO to choose from. Both programs include the entire suite of Protection Plus Benefits.

After March 1st of each year, this program choice is locked and cannot be changed on the Drake Support website

Protection Plus Standard - With the standard Protection Plus program, there is no cost or obligation for the tax professional to offer the program to their clients. The registration is free, and Protection Plus can be offered to clients at a base price of $44.95. An ERO can add a markup of up to $54, and these fees will be deducted from a refund when the taxpayer uses a bank product. To enroll a client, users will need to select the Protection Plus option on the AP Protection Plus Audit Protection screen on the general tab. To summarize: 

  • No cost for you as a tax professional and no minimum number of enrollments.
  • The standard program can be offered to your clients for as little as $44.95 per return.
  • You can add a markup fee of up to $54 to the regular enrollment rate.
  • This program is offered on a client by client basis, and the fee is billed to the taxpayer.
  • For returns attached to a bank product, the fees may be deducted from their refund. For returns filed without a bank product, any fee charged to your client should be collected with your tax preparation fee and you will remit the $44.95 to Protection Plus.

Protection Plus Firm Level – The Protection Plus firm level program allows an ERO to purchase Protection Plus at a discounted rate of just $10 per return when they agree to purchase Protection Plus for all of their individual 1040 and 1040-SR returns. Protection Plus will bill the tax office every other week during tax season. After tax season, billing will be done monthly. The amount drafted will be based on the number of individual tax returns (Forms 1040 and 1040-SR only) reported to Tax Protection Plus. Contact Protection Plus with questions.

To summarize: 

  • Provides a discounted rate of $10 per return when you agree to enroll all of your taxpayers into Protection Plus.
  • This fee will be billed to the ERO for every individual tax return e-filed from January 1, 2020 – October 31, 2020 through Drake Tax.
  • There is no line item that will display for Protection Plus when using this program, but a copy of the member agreement will be printed with each tax return.
  • Taxpayers may opt out of the disclosure, but you will still be charged $10 for those returns and they will still be eligible to use the Protection Plus services at a later date.
  • There is no markup or other revenue opportunity offered with the Firm Level program as the Protection Plus program will be included as part of your tax preparation fees.

How do I Set Up Protection Plus in Drake Tax?

After you register or update your registration on the Drake Support website, you must confirm your EFIN in the Firm setup.

  1. From the Home window, go to Setup > Firm(s) to open the Firm Setup dialog box.
  2. Select a firm and double-click (or select Edit Firm from the toolbar).
  3. Click to confirm your EFIN on this page.
    • Once your EFIN has been confirmed, the information from your Enterprise Office Manager will be populated into your Firm Setup for Protection Plus.
  4. Click Save

How does the Protection Plus Standard Program work?

Adding Protection Plus to a return – With the standard program, a tax preparer must select the box on the AP -  Protection Plus Audit Protection screen on the General tab. When this box is selected, the Protection Plus member agreement and a 7216 for disclosure are added to the tax documents. The 7216 should be signed by the taxpayer. There are also one or two line items added to the bill, depending on if there was a mark-up fee added. If a mark-up was added, the second line item will say “Protection Plus Document Prep Fee."


Note: You do not need to select No if the taxpayer does not want to enroll in Protection Plus. 

In View, on the bill under "Miscellaneous Fees" you will see:

  • The cost of the product appears as "Audit protection through Protection Plus."
  • The ERO markup appears as "Audit protection document prep fee."
  • The Network/Franchise markup appears as "Audit protection franchise/network fee."

Similar entries appear on the bank info sheet if there is a bank product in the return. If there is no bank product, the preparer is responsible for collecting the fees.

Protection Plus ERO Markup – When an ERO uses the standard program, the office can add up to $54 to the base price of $44.95 (maximum total price $98.95). The markup can be changed on Drake Support website (up until you have e-filed your first return), and must be in whole dollar increments.

Protection Plus Franchise/Network Fee Mark-up – If the office is part of a multi-site operation, they also have the option to add a franchise/network fee mark-up. Any amount entered into the franchise/network fee box is paid to the master EFIN, and any amount entered into the Protection Plus ERO mark-up is paid to the EFIN. In total, these two mark-ups can total no more than $54.

Rebates – In some cases, a tax office can earn a rebate by using the Protection Plus Standard program. If an ERO is interested in Protection Plus rebates, they will need to call Protection Plus.

Process with Bank Product Returns – If the return is attached to a bank product, the Protection Plus fees will be paid out of the taxpayer’s refund. The mark-ups are paid out by Drake around the 20th of each month during tax season for the units that were funded in the previous month.

Process with Returns not Attached to a Bank Product – The tax professional should collect payment for the entire Protection Plus fee at the same time they collect payment for their tax prep fees. A tax professional can remit the $44.95 to Protection Plus in one of two ways:

  1. Easy Pay – With this option, tax professionals are drafted by Protection Plus weekly for all enrollments from the previous week.
    • See attachments below for a PDF of this form. 
  2. Manual Payment on https://taxprotectionplus.com – Each tax professional has a login to the Protection Plus website. On this site, they can manually pay for each Protection Plus return not attached to a bank product.
    • For help logging in, the ERO should contact Protection Plus.

How does the Protection Plus Firm Level Program work?

Protection Plus Firm Level inside of Drake – When an ERO uses the firm level program, Protection Plus is automatically included on every 1040 and 1040-SR return that the tax office files. The user will not be able to select any options on the AP screen, and every 1040 and 1040-SR will have a Protection Plus member agreement included with the tax documents. There is no Protection Plus line item when an ERO uses this firm level program, but some offices may decide to increase their tax prep fees because of the additional services they now include.

Billing – Protection Plus will bill the tax office every other week during tax season. After tax season, billing will be done monthly. The amount drafted will be based on the number of individual tax returns (1040 and 1040-SR only) reported to Tax Protection Plus. Contact Protection Plus with questions.

Registration Cutoff – Registration for the firm level program can be completed until April 1st. After April 1st, an ERO can no longer register for the Firm level program. If an ERO registers after they have already prepared tax returns, they will be billed $10 for each of these filed returns.

Other Frequently Asked Questions

How long do the Audit Assistance Services last?

  • The Audit Protection is provided on the federal and state returns for three years.

How long do the Identity Theft Restoration services last?

  • Identity Theft Restoration services are provided for one year from the date of filing.

What is the latest that I can sign up for Protection Plus?

  • Enrollment for Protection Plus Standard is available at any time during tax season.
  • Enrollment for Protection Plus Firm level is available until April 1st. If an ERO registers after they have already prepared tax returns, they will be billed $10 for each of these filed returns.
  • If you sign up for one of the programs, but want to switch, you must switch before March 1st

If I’ve already e-filed some returns, then sign up for Protection Plus Firm Level, does that cover the returns that I have already e-filed?

  • Yes, it does. Protection Plus Firm Level coverage is applied to all 1040 and 1040-SR returns. In order to offer this coverage, you will be billed for any 1040 returns that you have already filed at the $10 per return basis.

Can Protection Plus be used on 1040-NR returns?

  • Protection Plus does not cover 1040-NR returns. If using Protection Plus Firm Level you will not be billed for a 1040-NR that is filed through Drake Tax. 

I’m enrolled for Protection Plus Standard, but the Protection Plus Cost isn’t showing on my bill?

  • Ensure that the AP screen is completed in the client’s return. This is located on the General tab > AP – Protection Plus Audit Protection screen. Once the Yes box is checked, the Protection Plus documentation and 7216 will show in view and the line item will be applied to the bill.

I’ve signed up for the Protection Plus Firm Level. Why is there no line item for Protection Plus on my bill?

  • Protection Plus Firm Level does not generate a line item. It is automatically applied to all 1040 and 1040-SR returns. A copy of the Protection Plus Member Agreement will be printed, however.

One of my clients would like to opt-out of the Protection Plus, but I’ve signed up for the Firm Level.  Is there a way they can opt out?

  • The taxpayer can opt out of signing the agreement, however, you will still be charged $10 for those returns and they will still be eligible to use Protection Plus services at a later date.

Using Protection Plus Firm Level, how often will I be billed?

  • Protection Plus will bill the tax office every other week during tax season. After tax season, billing will be done monthly. The amount drafted will be based on the number of individual tax returns (1040 and 1040-SR only) reported to Tax Protection Plus. Contact Protection Plus with questions.

If I want to add a mark-up to Protection Plus, where can I list that?

  • If using Protection Plus Standard, a mark-up of up to $54 may be added when you enroll. To do so go to support.drakesoftware.com > Products > Audit Assistance. You cannot add a mark-up fee to the Protection Plus Firm Level since the taxpayer is not charged for enrolling (billed to preparer/ERO/Company). 

Is there some place in the software where I can opt out of my Protection Plus mark-up for a single return?

  • Fees are charged to all taxpayers who opt-in to Protection Plus (Standard). You cannot opt-out of charging the mark-up fee to a single taxpayer if you have chosen to charge a mark-up fee.

If the taxpayer is not using a bank product, how does Protection Plus Standard collect the fee for Protection Plus if the taxpayer chooses to opt in?

  • When a bank product is not used with a return, then the tax preparer is responsible for collecting the Protection Plus fee and remitting it to Protection Plus.

Can I still offer my client Protection Plus (Firm Level or Standard) if their return is being paper filed?

  • Yes, you can. Simply log on to the website at TaxProtectionPlus.com from there you may manually enter the taxpayer's information, or you can call Protection Plus at (866) 942-8348.

How can I reach Protection Plus? What are their hours?

  • Phone: (866) 942-8348
  • Hours: Monday – Friday 8:30 am – 5:30 pm EST

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