Sometimes the last thing anyone wants to think about is filing their taxes or wondering if they have found a good tax preparer.  But it’s better to conduct this search as early as possible. The closer you get to tax day, the harder it is to find a quality tax preparer.  Following are various points to consider when choosing a tax preparer:

Preparer Credentials and Ethics

If you own a business and/or have several sources of income and/or deductions to consider, you will need a preparer who can handle complex tax issues and understands the industry that you work in.  A firm that hires tax professionals who are Enrolled Agents (EA) and Certified Public Accountants (CPA) not only addresses these issues, but has unlimited representation before the IRS. This is very beneficial in the event of an audit or collection proceedings.

EAs and CPAs must not only pass rigorous testing requirements to achieve their designations but they must regularly complete a required number of continuing professional education hours to maintain these designations. Because these tax professionals are regulated, it is easy to verify if they have a questionable history by checking with the IRS Office of Enrollment for EAs, and the state board of accountancy for CPAs.

Unenrolled preparers often have limited training and are allowed limited representation on behalf of their clients in IRS proceedings. Furthermore, without regulation, it may be difficult to check their background history.

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PTINS and E-filing

A paid preparer must have a Preparer Tax Identification Number (PTIN) and if they prepare and file more than 10 returns for clients they must file electronically.  The client copy of the tax return should show the preparer's name and PTIN in the signature area of page two of the Form 1040.  Never agree to do business with a tax preparer who does not provide this information and/or refuses to provide their clients with copies of their tax returns.

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Signing the Tax Return

In the height of a busy tax season, it is easy to make mistakes.  To ensure accuracy, tax firms will use a double check process where tax returns are prepared by tax accountants and then reviewed by a senior tax accountant.  The senior tax accountant handles the final review of the tax return and signing of the tax return.  An experienced senior tax accountant will then discuss the tax return results with their client and make sure the client is comfortable with the numbers on the return prior to asking the client to sign it.  Avoid tax preparers who do not enlist a double check process and refuse to discuss the tax return results with their clients or ask their clients to sign a blank tax return.

Records and Documentation

Good tax preparers will ask for all your W-2, 1099 and 1098 forms as well as other records and receipts to verify income, expenses and credits.  Preparers who are willing to e-file returns using paystubs in place of W-2s are in direct violation of IRS rules and regulations.

Preparer Availability

Because the IRS and most States conduct audits and send letters of inquiry throughout the year, it is best to work with a preparer who maintains office hours beyond the April 15th filing deadline so they are available to answer your questions or assist with any tax return correspondence.

Fee Determination

Instead of asking a preparer what their fees are, ask how they determine their fees.  For taxpayers with more complex returns that require several forms, it is normally better to select a firm that charges a set fee for the type of return (1040, 1065, 1120S, 1120), rather than one that charges by form. The reason is because this can be rather costly.

Client Security

Unfortunately, the tax preparer industry has not remained immune from the ever-increasing problem of security breaches.  Never hesitate to ask a preparer how they safeguard client confidentiality in the form of physical and electronic security of their clients' information and records.  If the answer is not to your satisfaction then walk away.

At ATBS, we prepare taxes for over 10,000 owner-operators each year. If you are considering hiring someone to prepare your taxes, contact us today!

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Michelle Nagel, Senior Tax Accountant

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