Introduction
If you are looking for a tax accountant, you will want to determine what you need from them first. Whether you are looking to file late taxes, resolve a tax debt, or fight an audit, you need to ensure that any accountant you consider hiring specializes in this area. You should also make sure that anyone you hire has a Preparer Tax Identification Number (PTIN).
Where to Look for a Tax Accountant
Asking for referrals can be helpful when it comes to finding someone suitable for your needs. Ask trusted business owners, financial advisors, and attorneys, as well as any friends or family members who work with an accountant. If you are requesting a referral from someone, explain to them why you are looking for an accountant and what you want the accountant to do for you. This information will help guide people in the right direction. Don’t hesitate to contact the firm or accountant to see if they have the necessary experience to handle your taxes if there is anything unusual about your situation.
Verifying the Accountant
Be wary of an accountant who promises you a large tax refund from the outset, before even analyzing your personal financial situation. The same goes for someone who tells you that you can deduct a large number of expenses before really talking to you. No one can legally accept payment for preparing your taxes unless they have a Preparer Tax Identification Number (PTIN) from the IRS. This number must be included on any tax return they file on your behalf. There could be something wrong if you don’t see one.
You can disconnect if necessary. Don’t be afraid to shop around or change accountants if you are not satisfied or comfortable with the service you are receiving, even if you are in the middle of the process and the tax deadline is approaching. You can always request an extension for filing your return by submitting IRS Form 4868 instead of your 1040 form, giving you more time to find the right professional.
Retail Tax Companies
Retail tax companies like H&R Block, Jackson Hewitt, and Liberty Tax Service offer competent assistance if you just want to file a relatively simple tax return. Sometimes you can even find certified public accountants (CPAs) and enrolled agents (EAs) working in these offices. Ask if you can meet with a certified public accountant (CPA) or enrolled agent (EA) or a senior tax preparer if you decide to use one of these services. This way, you will be dealing with a more experienced professional.
Types of Tax Professionals
Depending on your situation, you may want to hire an enrolled agent, a certified public accountant (CPA), or a tax attorney. Enrolled agents (EAs) must pass rigorous examinations and undergo background checks conducted by the IRS. They are the highest credentials you can obtain from the IRS. Some enrolled agents are approved without an exam because they have actually worked for the IRS, but everyone must complete continuing education requirements every three years. Enrolled agents often specialize in particular tax areas, and they are best suited for handling complex tax situations. They can represent you before the IRS if you are facing an audit or collection procedures.
Certified public accountants (CPAs) have passed the challenging CPA uniform exam and are licensed by the state accounting board in which they operate. They hold degrees in accounting from a university or college, and licensing requirements include meeting specific character and experience standards. CPAs often specialize in particular areas related to accounting. Some specialize in tax accounting, but not all CPAs handle tax issues. A CPA can also represent you before the IRS if you are dealing with an audit or collections.
Attorneys
Tax professionals are lawyers specialized in tax law, licensed by state courts and bar associations. They may also hold master’s degrees in tax law, in addition to the required legal degree. Lawyers are best suited for complex legal matters such as preparing estate tax returns or presenting your case before the U.S. Tax Court. They are also typically subject to continuing education requirements.
Interviewing Tax Accountants
You do not want to entrust your personal affairs to someone you haven’t met, so arrange a meeting with the professional to discuss your situation and ask some questions before your official first visit, even if you have to do this over the phone. Ask for references, just as you would with anyone you are considering hiring, and reach out to those references to verify their accuracy.
Questions for References
When talking to references, remember that not everyone will feel comfortable speaking to you, and keep it simple. Ask basic questions like “Are you satisfied with their services?” or “Did you encounter any issues with them?” The answers to these questions can tell you a lot, especially if you stop talking after you ask and let the other person say anything that comes to mind.
Questions for Accountants
Asking the right questions can help ensure that you find someone who is experienced and trustworthy. Some areas to explore include:
- What licenses or certifications do you hold?
- How long have you been working in tax?
- What tax matters do you specialize in?
- Do you outsource any part of your work, or do you and/or your staff do all the work personally?
- How long will it take to complete my tax return?
- What are your fees? Can they be negotiated? Can I get that in writing?
- What is your privacy policy?
- Do you think I am paying too much, too little, or the right amount of taxes?
Accountants who prepare taxes or work as financial planners should provide written statements regarding their privacy policies to all clients. Request a copy if one is not provided to you.
Checking Tax Accountants
Conduct a quick background check after the initial interview. You might even search for the professional’s name on social media. Find out what is being said about them on their website, and what others are saying about them.
Contact your state’s board of accountancy to check the status of a Certified Public Accountant (CPA) license or to see if any disciplinary action has been taken against the accountant. You may also inquire with the Office of Professional Responsibility at the IRS if a Registered Agent (EA) has been reprimanded or subjected to any other disciplinary actions. You might also want to check with the local chamber of commerce.
Remember that you, not the accountant, are ultimately responsible for the accuracy of the information on your tax return.
Frequently Asked Questions (FAQs)
What should I look for when choosing a tax preparer?
You will want to ensure that the tax preparer specializes in the area you need help with, has an active Preparer Tax Identification Number (PTIN), and has no record of professional misconduct. You should also check their qualifications and understand how much it will cost to hire them.
Is a Certified Public Accountant better than a tax preparer?
Certified Public Accountants (CPAs) are required to have higher training and education than licensed tax preparers. However, CPAs may be more expensive than licensed tax preparers. Whether you hire a CPA or a tax preparer should depend on your tax needs.
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Sources:
IRS. “Understanding Tax Return Preparer Credentials and Qualifications.”
IRS. “About Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.”
IRS.
“Enrolled Agent Information.”
The CPA Journal. “New FTC Privacy Disclosure Rules.”
IRS. “Search for Disciplined Tax Professionals.”
Source: https://www.thebalancemoney.com/tips-for-finding-the-right-tax-accountant-3193050
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