Filing your taxes correctly and responsibly is important. Small mistakes or oversights can result in large consequences, both legally and financially. The reasons to hire a professional are plentiful, but choosing the right professional is just as crucial. The IRS and TAXES MADE EZ, INC have provided this guide to finding a qualified and experienced professional to take care of your tax filing needs.
To prepare taxes for an individual other than yourself, you need to register for a PTIN, or Preparer Tax Identification Number. This is the only government-regulated requirement to prepare taxes, however, the IRS strongly urges that you take steps to verify your preparer when searching for a tax professional.
Check the IRS Website
One easy way to check the credentials of a tax professional is to visit the IRS website, where you will find a directory of Federal Tax Return Preparers with Credentials. You are able to utilize this tool to search for individual preparers. Keep in mind that this directory is listed by the actual preparer, not the business name.
Know the types of credentials that are available
There are many different levels of credentials and descriptions used for tax professionals. The most common are:
Enrolled Agents –Enrolled agents are licensed by the IRS and have stringent courses and examinations which they must pass. They are subject to continuing education every three years.
Certified Public Accountants – A Certified Public Accountant is licensed by state boards of accountancy. They must pass the Uniform CPA Examination, and complete a study in accounting at a college or university. There are character regulations and ethical requirements they must also comply with, and CPAs undergo continuing education to maintain their license.
Attorneys – Attorneys will sometimes offer tax filing services. They generally have a degree in law and have passed a bar exam.
Annual Filing Season Program Participants- These are experienced preparers without the above credentials. It’s a program which educates those who hold a PTIN and wish to return and continue their education. Upon completion of the program each season, they are given a certificate.
PTIN Holders- Tax return preparers with a preparer tax identification number, but no credentials.
Understanding these classifications helps you to be better prepared to choose a professional. The IRS recommends choosing those with credentials and experience. An example of this would be a Certified Public Accountant.
In addition to knowing the credentials, understand the level of representation provided
One of the main benefits that you can receive from hiring a tax professional is the level of protection it provides you. An enrolled agent, CPA, or attorney will have what is labeled by the IRS as unlimited representation rights. This means that in the case of an audit, collection, or appeal, the professional can fully represent a taxpayer or client and defend their rights and interests. An Annual Filing Season Program Participant or PTIN holder is usually limited in their representation rights, and can only speak for taxpayers whose returns they personally filed, and only in front of certain parties. They cannot represent the taxpayer in appeals or collection issues, even if they prepared the return in question.
Check your preparer’s history
The Better Business Bureau and customer reviews are a great way of finding out how the preparer has performed in the past.
Look into service fees
The IRS specifies to be wary of services that offer a percentage fee based off your refund. The service fee should be consistent. Also, be careful of hidden fees. For example, there may be a basic filing fee, but then you are charged additional fees for services which are usually included when you use a professional tax preparer. Make sure you understand the fees associated with the preparation of your return before you file. Remember, you want to receive professional quality services. If a price seems too good to be true, make sure you research the details before acting.
Find out the availability of your preparer
Before you decide to file with a professional preparer, find out their availability year-round. Seasonal preparers may not be available to assist or answer questions that you have after tax season is over, and would not be able to help with correspondence with the IRS. Having an accountant who is open year-round, or provides off-season hours where you can contact them will save you stress in the long run.
Make sure they offer e-file options
E-filing is faster and gets processed more quickly by the IRS. Not having this option also means that your preparer might not be as professional as they claim, since the IRS requires anyone who prepares ten or more returns a year to have e-file available.
Hiring a professional preparer saves you time and money. Before you hire one, make sure you do your research and see that they fit into the above categories. If you live in the Blackwood, NJ area and would like to speak with a professional who meets all the criteria outlined in this guide, click the BLUE tab on this page to contact TAXES MADE EZ, INC.
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