Guide to Choosing a Tax Preparer

It’s that time of year again– tax time! Yet, unfortunately, the tax laws are still confusing! Hence, many individuals and small business owners will find themselves paying a tax preparer for their expertise. However, individuals and small business taxpayers should take notice that they are legally responsible for what is on their tax returns even if it was prepared by someone else! Therefore, taxpayers should do their research and consider the following when choosing a tax preparer.

NEW IRS Registration Requirements: IRS regulations require that ALL paid tax preparers have a Preparer Tax Identification Number (PTIN) and use it on the tax returns they prepare.  The IRS is also subjecting tax preparers to background investigations as well as implementing a requirement to establish minimum competency to prepare returns through administering the Registered Tax Return Preparer exam.  Enrolled Agents, CPAs, and Attorneys are exempt from this IRS exam since their credentials already required compliance with more stringent exams, education, and background investigations.  Be sure to inquire with your tax preparer about their compliance with the new law.

***Update***  The Registered Tax Return Program is no longer active as a result of a lawsuit.  Instead the IRS has enacted a voluntary Annual Filing Season Program to recognize the efforts of return preparers who aspire to a higher level of professionalism.  Here is a link the the Tax Preparer Directory controlled by the IRS.

 

Tax Preparation Fees: Avoid tax preparers who set their fees based on how much of a refund they can obtain for you or who promise large refunds! They generally will have way too much of an incentive to take aggressive positions on federal or state tax returns which may spell trouble with the IRS or state later down the line. Remember, taxpayers are responsible for their returns even if they used an accountant or other paid preparer!

Tax Preparer Qualifications: Beside the aforementioned new IRS registration requirements, it is wise to ask a tax preparer additional questions.  Is your tax preparer a music teacher by day and a tax preparer by night? Or did your tax preparer just finish a 2-week training course at a local tax chain? Insist on using an experienced tax preparer to minimize your audit exposure. Ask your accountant about any tax-related certifications (i.e., CPA, enrolled agent, attorney, etc.) or memberships in tax-related organizations. You may be surprised at how affordable working with experienced tax preparers can be! Often times, experienced tax preparers can find additional (and legal) refund opportunities that far exceed the cost of their services.

Need A Tax Preparer After Tax Season: An empty office is space is probably not what you want to see if you need tax assistance after April. You also probably don’t want to have to call an 800-number to try to explain your situation over the phone should an issue arise. Consider working with a local accountant or tax preparation firm that is accessible year round to assist you with any post tax-season needs.

Simply Taxes, LLC is a local year-round tax preparation firm with an office located in North Raleigh.  Our Raleigh accountants are ready to assist you with your questions pertaining to your taxes!

Related Articles:

What’s New for 2012 Tax Returns (Due in April 2013)?

What is My Tax Bracket?  2012 Tax Rates

 

The information contained within this article is for general guidance only. As such, it should not be used as a substitute for consulting with professional accounting, tax, legal or other competent advisers. 

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