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How to Guide
How to Choose a Tax Professional
Tax codes are becoming more complicated every year. Why run the risk of making a mistake? A professional tax preparation service can help you file your quarterly or annual tax returns. A reliable tax preparer can save you time and money.
Finding experienced and responsible tax professionals requires research. The IRS is the first to urge caution. After all, a tax preparation service does not absolve you of problems stemming from an incorrect tax return.
There are many tax preparers who are honest. They provide excellent service to their clients. Others, unfortunately, are less than scrupulous. They cause their clients legal and financial nightmares.
As of 2011, the IRS requires professional tax preparers to register, pass a competency test and meet continuing education requirements. This government agency also licenses its own Enrolled Agents who must meet the same standards. The Treasury Department authorizes these Enrolled Agents to aid taxpayers at all levels of an audit.
Before hiring a tax preparer, verify that they will represent you if you are audited by the IRS. Ask about the preparer’s audit rate.
The person you are hiring must specialize in tax preparation. A certified public accountant might not be a tax specialist, and is no guarantee you will not be audited. The federal tax code changes every year. It is a challenge for tax professionals to stay current with the changes. A CPA specializing in taxation should have documentations of any continuing education classes completed in the past year.
It is important to check on your preparer’s as well as the firm’s credentials. The Better Business Bureau will inform you if they have dubious reputations. For more verification, contact your state’s board of accountancy or your state bar association’s tax lawyers to research a preparer’s professional record.
A legitimate and reputable professional tax preparer should have:
- A relationship with an organization requiring continuing education
- A fee schedule based on the complexity of your return
- The willingness and ability to answer all of your questions
- Availability extending beyond the preparation and filing of your tax return
- Knowledge of your state’s tax laws
- Familiarity with any special circumstances that may apply to you
- A willingness to include an itemized list of any judgment calls it has made and attach it to your copy of the return
- A willingness to provide an in-person review of any expected refunds with the preparer.
Warning signs of a disreputable tax preparer may include:
- Claims that they can obtain larger refunds than their competitors
- Guarantees of a refund up front
- A request for your signature on a blank tax form
- An unwillingness to sign a return, known as “ghost” preparation.
The best tax professional has a proven track record of competence, a stellar reputation and an attitude of respect for clients. It is your financial and legal status at stake. The preparer should be ready and able to stand behind their work and beside you if you ever need to appear for an audit.