How to Choose the Right Tax Professional to Prepare Your Tax Return
As with any major decision in life, you should choose your tax preparer wisely. Paying taxes is a serious matter, so it’s important where you choose to have your tax return prepared. While you only need to file your taxes once each spring, you can save yourself from any last minute stress by spending time now to find the right tax professional to prepare your tax return.
Choosing the Right Tax Preparer for You
There are a number of points to keep in mind as you search for a quality tax preparer who fits your needs. Fortunately, the IRS has provided taxpayers with a thorough list of criteria to keep in mind, which ALG Tax Solutions happily adheres to ensure each of our clients receives tax service of the highest quality and level of legality possible.
This is what the IRS suggests when looking for the right tax professional to prepare your tax return for the upcoming tax season:
– Choose an ethical tax preparer that you can trust with your personal data.
– Know what tax preparers charge up front. Tax preparers who base fees on refund percentages or claim to earn clients larger refunds than other preparers are bad news.
– Make sure the tax preparer has a current Preparer Tax Identification Number (PTIN), which is required for a tax professional to prepare tax returns.
– Research the tax preparer’s history with the Better Business Bureau and IRS Office of Enrollment. For certified public accountants, verify with the state board of accountancy, and, for attorneys, check with the state bar association.
– Request an IRS e-file so that your tax return is filed electronically. Be aware this is already required of tax preparers who file more than 10 tax returns for clients.
– Provide records and receipts to your tax preparer. Avoid tax preparers who are willing to go against IRS e-file rules and claim they can and will e-file your tax return using a pay stub instead of Form W-2.
– Review and ask questions about your tax return before signing. You’re responsible for what information your tax return claims, even if a tax professional prepares it for you.
– Don’t sign a blank tax return. Make sure the tax return is filled out with your proper information and that you’ve reviewed the information before signing.
– Make sure the preparer signs the tax return and includes their PTIN. The tax preparer is also required to give you a copy of the tax return.
Determining the Validity of a Tax Preparer’s Credentials
The above criteria provided by the IRS for choosing a tax preparer are vital for helping you decide on the right tax professional to handle your tax returns. But you can go a step further and determine the validity of a tax professional’s credentials and qualifications by referencing the following information that lays out the various credentials the IRS requires of tax professionals depending on their professional role:
Enrolled Agents: Enrolled Agents are licensed by the IRS and must undergo continuous education––72 hours worth every three years––to ensure they’re able to provide quality service to taxpayers. They’re also subject to a suitability check and are required to pass a three-part Special Enrollment Examination that proves their proficiency in federal tax planning, as well as individual and business tax return preparation and representation.
Certified Public Accountants: Certified Public Accountants are licensed by state boards of accountancy, the District of Columbia, and U.S. Territories, and must clear a series of educational hurdles. CPAs must pass the Uniform CPA Examination and have an educational background in accounting from a college or university, not to mention they must be in good standing with boards of accountancy. Additionally, CPAs must partake in continuous education– 40 hours every year– to keep their CPA license active. While CPAs offer multiple services, some specialize in tax preparation and planning.
Attorneys: Attorneys are licensed by state courts, the District of Columbia, or the state bar, and have earned a law degree or passed a bar exam. Attorneys can provide various services, but some specialize in tax preparation or planning.
Know Your Representation Rights as a Taxpayer
As the taxpayer, you have representation rights in regards to having your paid tax preparer or another third party speak with the IRS about your tax return preparation, payment or refund issues, and mathematical errors.
The third party authorization checkbox on Form 1040, Form 1040A, and Form 1040EZ gives your tax preparer the right to receive and examine tax returns and return information for one year from the due date of the return, not including tax return extensions.
Enrolled agents, CPAs, and attorneys have unlimited representation rights before the IRS. These tax professionals are able to represent their clients on any tax matter, including audits, payment and collection issues, and appeals.
Tax preparers without these credentials––called unenrolled preparers––have limited representation rights, and can only represent clients whose returns are prepared and signs before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service. Unenrolled preparers can’t represent clients whose tax returns they didn’t prepare, nor can they represent clients for appeals or collection issues, regardless of whether they prepared or signed the tax return.
Beginning Jan. 1, 2016, active PTIN holders without professional credentials who don’t participate in the IRS’s Annual Filing Season Program (AFSP) will lose their limited representation rights for tax returns they prepare and sign, and only AFSP participants will qualify for limited representation rights. Keep this in mind if you’re planning on consulting a PTIN holder without professional credentials to prepare your tax return.
Making a Decision
As you can see, there is a litany of complex information. It’s important for you to be educated as a taxpayer when looking for the right tax professional to prepare your tax return this upcoming tax season. But at ALG Tax Solutions, we want our regular clients and community members in general to be as knowledgeable as they can be when it comes to tax return preparation and representation.
If you’re looking for a group of quality tax professionals to handle your tax return for the upcoming tax season, please feel free to learn more about our quality services.