Choosing the right tax professional: before you file, read these last-minute tips.
IT'S THAT TIME OF YEAR AGAIN--TAX SEASON. AND IF you're one of nearly 1.4 million Americans who were audited last year, you know that now is not the time to take a gamble. "Choose your preparer as carefully as you would choose your doctor or lawyer," advises Michelle Lamishaw, spokeswoman for the Internal Revenue Service. Filing a return with inaccurate information could lead to serious consequences. Here are some tips for picking a winner so that you'll stay out of hot water:
Select a reputable tax preparer with appropriate credentials. Ensure that this person has been in business for at least a few years, is licensed, and has a complaint-free history--which can be checked with the Better Business Bureau (www.bbb.org), the state's board of accountancy for certified public accountants Certified Public Accountant (CPA)
An accountant who has met certain standards, including experience, age, and licensing, and passed exams in a particular state. , or the state's bar association for attorneys. There are several types of preparers: Enrolled agents An Enrolled Agent (or EA) is a tax professional recognized by the United States federal government to represent taxpayers in dealings with the Internal Revenue Service. The profession has been regulated by Congress since 1884. are licensed by the U.S. Department of the Treasuryto represent taxpayers before all administrative levels of the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. for audits, collections, and appeals; CPAs are most often college graduates who have passed a national exam and met additional state education requirements; and tax attorneys have advanced training in tax law. Other professionals include accredited accredited
recognition by an appropriate authority that the performance of a particular institution has satisfied a prestated set of criteria.
cattle herds which have achieved a low level of reactors to, e.g. tax advisers, accredited tax preparers, and certified financial planners Certified Financial Planner (CFP)
A person who has passed examinations accredited by the Certified Financial Planner Board of Standards, showing that the person is able to manage a client's banking, estate, insurance, investment, and tax affairs. ."If you're looking for Looking for
In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. someone who can represent you before the IRS in all matters including audits, collections, and the appeals process, you'll need an attorney, a CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. , or an enrolled agent," Lamishaw says. "Other preparers may only represent taxpayers for the audits of the returns they prepared," she says. You can contact your state's board of accountancy to check the status of a CPA'S license or to determine whether or not there has been disciplinary action taken against him or her. Contact the IRS Office of Professional Responsibility (202-927-3397) to check an enrolled agent's background.
Be wary of large tax preparation chains. Although they offer convenient walk-in services, many large firms are not cost effective and often employ inexperienced in·ex·pe·ri·ence
1. Lack of experience.
2. Lack of the knowledge gained from experience.
in tax preparers, says Cindy Hocken berry, tax information analyst for the National Association of Tax Professionals. Furthermore, once tax season is over, most large companies close their offices or reduce staff. Small firms often offer year-round services and have flexible hours. If you need help finding a tax preparer, you can search the National Association of Tax Professionals online database by zip code zip code
System of postal-zone codes (zip stands for “zone improvement plan”) introduced in the U.S. in 1963 to improve mail delivery and exploit electronic reading and sorting capabilities. (www.natptax.com).
Query your prospective preparer. Ask a series of detailed questions about how long he or she has prepared taxes, the types of returns prepared, knowledge of tax law changes, the person's education level, fees, credentials, and whether the individual has professional liability insurance. "Taxpayers are ultimately responsible for the items reported on their tax returns," Hockenberry says. "Choosing the tight tax preparer requires the same care one would use in choosing any professional."
Know their fees up front. Don't be shy about asking your accountant how much the tax preparation will cost. "Fees can be based on an hourly rate, by the form or schedule, or by the complexity of the return," Hockenberry says. "Clients should always ask the preparer how they structure their fees and how much it will cost to have the return prepared."
Educate yourself. You can learn more about the process by reading books such as Taxes 2008 for Dummies (For Dummies; $16.99). Also, visit the IRS' Website (www.irs.gov) and search for the article entitled en·ti·tle
tr.v. en·ti·tled, en·ti·tling, en·ti·tles
1. To give a name or title to.
2. To furnish with a right or claim to something: , "Tips for Choosing a Tax Preparer."