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How to Choose a Tax Preparer
Source:
latimes.com
- Jan 30, 2013
By STEPHEN D. FROIKIN Special to The Chicago Tribune
OK. So you've decided to skip the sharp pencil routine this year and let someone else prepare your taxes. Who should it be? Aunt Millie? A CPA? Or do you need a lawyer to do it?
Any of these answers could be right. It depends on the complexity of your situation and on the qualifications of the individual who will be doing the work.
Here are descriptions of the qualifications of the folks who have put out shingles for tax preparation, some practical advice on how to find them, and some questions to ask before you commit yourself.
Who is qualified?
The first thing you should know is that the IRS does not certify tax preparers. (They do certify enrolled agents.) Anyone can do tax returns as far as the U.S. government is concerned, although some states impose a licensing requirement. California has education and experience requirements for tax preparers. Generally, anyone who preparers a tax return for a fee--and who isn't either an enrolled agent, a public accountant, a certified public accountant or a lawyer--must meet the state requirements to become a registered tax preparer.
The only federal regulation of tax preparers is a set of penalties that puts preparers on the hook if they prepare returns that they know are wrong or that they should know are wrong.
As a result, all sorts of people offer tax return preparation services:
Storefront preparers.
This includes the big chains, like Jackson Hewitt or H&R Block, and solo operations. These people have all sorts of credentialed and noncredentialed folks, ranging from lawyers and CPAs to totally uncertified. The larger firms have training programs; the smaller ones don't. The person who prepares your return may not be authorized to represent you before the IRS if your return is audited, but someone else at the firm may be.
Enrolled agents.
These are the only people who have passed an exam strictly on taxes. It's given by the IRS, and the people who pass are entitled to represent you before the IRS if your return is audited. They can even represent you in tax court, if things go that far.
Certified financial planners.
In recent years, a number of organizations have offered certification as "certified financial planner." Their expertise lies in financial planning, estate planning and investments, and may include taxation. But the title does not guarantee it.
Certified Public Accountants.
A CPA is an individual who is certified by the state to act as a public accountant based on a test and experience as a noncertified accountant. Many CPAs specialize in taxation, but many do not. CPAs may represent you before the IRS.
Lawyers.
Representing you is the specialty of a lawyer. Return preparation usually is not. Your lawyer may prepare your return as a courtesy, but most don't seek this type of work.
Clinics.
Various organizations offer tax assistance for elderly or low-income taxpayers. In terms of qualifications, these folks are probably most like storefront preparers, but this could vary a whole lot. The big plus of a clinic, of course, is that the fee is usually zero or quite low.
Finding the preparer for you
So where should you look? Your best bet is to ask your friends. Find someone who is happy with a preparer's work and get the preparer's name. Friends in similar financial situations are the best source.
READ MORE:
http://www.latimes.com/la-taxbasics-story1,0,850553.htmlstory
Category: General Business
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