How Do I Find a Tax Preparer That is Right for Me?

In a previous article, Should I Prepare My Own Tax Return?, I discussed whether you should prepare your own tax return or hire a professional tax return preparer. Once you have made the decision not to prepare your own tax return, how do you find a tax return preparer that is right for you?

Anyone can setup up a business as a tax preparer. The only requirement is if someone prepares more than 10 tax returns for a fee, he or she must get a Preparer Tax Identification Number (PTIN). After a recent court ruling, the IRS cannot charge a fee for the PTIN. Anyone can register and get a PTIN. The IRS also tried to require all professional tax return preparers to have minimal educational requirements and pass a test, but that requirement was also struck down by the courts. As a result, you need to question and investigate the person or firm that will be preparing your tax return.

Of course, there are ways to make sure you are getting the best possible advice and service. Start by looking for the professional tax return preparers.

Who are the professionals?

CPAs who specialize in taxes
Tax Attorneys
IRS Enrolled Agents

Each of these groups of professionals are required to take a minimum amount of training each year by their respective professional organizations. They need to do this to keep up the changes in regulations and latest interpretation issued by the IRS or the U.S. Tax Court. In an age of extraordinarily complex tax rules, a professional can make sure you take the appropriate deductions and pay the minimum taxes allowed by the law.

What Does the IRS Say?

The IRS tips for finding a tax return preparer:

The IRS tips for finding a tax return preparer:
Taxpayers should choose their tax return preparer wisely – with good reason. Taxpayers are responsible for all the information on their income tax return. That’s true no matter who prepares the return. Here are ten tax tips to keep in mind:
Check the Preparer’s Qualifications.
This tool helps taxpayers find a tax return preparer with the qualifications that they prefer. The Directory is a searchable and sortable listing of preparers with a credentials or filing season qualifications. It includes the name, city, state and zip code of:

Attorneys
Certified Public Accountants
Enrolled Agents
Annual Filing Season Program Participants

Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent clients in more limited situations. Non-credentialed preparers who do not participate in the Annual Filing Season Program may only represent clients before the IRS on returns they prepared and signed on or before December 31, 2015.

For more information, check the Understanding Tax Return Preparer Credentials and Qualifications page.
Source: https://www.irs.gov/uac/things-to-remember-when-choosing-a-tax-preparer

In addition to what the IRS suggests, I would add a few other tips.

“Simple” Returns

If single and your income is less than $100,000, or married with income less than $150,000 per year, AND all your income is from an employer who provides you with a Form W-2, your return would be considered simple. Any competent and credentialed tax return preparer could prepare your return. If the person or firm is a CPA, Tax Attorney, Enrolled Agent or passes the IRS AFSP tests, they will be qualified to prepare your return. Since your return is “simple,” and all tax software can manage the calculations, it makes sense to shop for a tax return preparer based on cost. You probably don’t need a medium to large CPA firm or law firm to prepare your return. The sole proprietor, small firm, and store front franchises like H&R Block can provide the services you need.

“Complicated” Returns

However, as your tax return becomes more complicated and requires more IRS Forms and Schedules, not only will your tax preparation fees become more expensive, you will require more services. W hat makes a return complicated? Click link to find out.

Make sure that the sole proprietor or firm you are working with has experience with your tax situation. Preparing returns for someone with estate issues is different than preparing a return for a farmer or rancher. Ask who will be preparing your return within the firm. It is common within many accounting and tax law firms, that seasonal tax preparers help with the workload. These individuals are usually experienced tax return preparers, but choose to work as a contractor or on a part-time basis. It is important to make sure the firm has processes for supervising the permanent and part-time tax return preparers.

The firm you work with should be able to explain the tax return preparation workflow. Even with the most experienced preparers, at least one other senior member of the firm should review the return with a fresh set of eyes, to make sure the tax return is properly prepared. After the return is finalized, reviewed by the client, and signed, there should be procedures to make sure the return is e-filed with the IRS and accepted (you should ask for the confirmation), and that copies of all your original papers are saved and originals returned to you. (You should save all the original tax papers for at least three years or longer.)

Actively Participate!

No matter who prepares your tax return, you are responsible for the return. Make sure you understand how the return was prepared and why your refund or the taxes you owe is the amount shown. Professional tax return preparers want clients to ask questions. Quite often through discussion with a client we find new information that may require changing the return. While it would have been better to know the information before the return was prepared, getting the most accurate tax return and avoiding amending the return later is the top priority. Spend the time to understand all the issues related to your return.

How Much Should I Pay?

Professional tax preparers charge by the form or by the number of hours to prepare your return. If you come across one whose fee is based on the size of your refund or who says he or she can get you a bigger refund than another tax return preparer, just say no. Continue your search for another preparer.

Other Qualifications to Look For?

Not only are professional tax return preparers required to meet minimum annual education requirements, they often join and participate in professional organizations. Participation in any of the following organizations is a good sign:

National Association of Tax Professionals

National Association of Enrolled Agents

National Society of Accountants

American Institute of Certified Public Accountants

American Academy of Attorney CPAs