If you intend on hiring a tax consultant to assist with your returns this year, the IRS offers some advice to consider when selecting one. The right one can save you hundreds and even thousands of dollars. Unfortunately, choosing the wrong one or trying your hand with an unfamiliar online software program will not only waste your time and money, but result in the need to hire another professional, missed deductions, and valuable tax advice. If yours is simple in nature, you may consider skipping over the $200 per hour CPA and opting for a person who is lesser in demand. However, if you have a complex return involving multiple judgment calls and those tricky gray areas, hiring a professional is a smart idea. But, how do you know who is the best person for this job? Here is some advice when shopping around:
Most importantly, the IRS urges taxpayers to strictly use tax consultants who actually sign each return they prepare and who enter their Preparer Tax Identification Numbers (PTINs). New regulations require all paid tax preparers to have a PTIN. Furthermore, you should find out if he/she has any affiliation with professional organizations and attends continuing education courses. In the near future, the IRS will make it a requirement for those preparers who are not a CPA, enrolled agent, or attorney to take a test in order to become a Registered Tax Return Preparer.
It is always a good idea to check the person’s history with the Better Business Bureau to ensure no disciplinary actions or licensing revocations have ever occurred. Additionally, you can check with the state bar for attorneys, as well as the IRS Office of Enrollment for enrolled agents.
If the person you select bases his or her fees on a percentage of your refund, it is probably best you search for someone else. It should also be understood that you ensure that all of your refunds will be deposited to your account and in your name.
Over one billion individual tax returns have been securely processed since the introduction of electronic filing in 1990. Unless you opt for a paper copy, all paid preparers filing for over 10 customers are required to do so electronically.
Records & Receipts Request
Any reliable professional will request all backup information and ask you numerous questions to properly determine your deductions. You should also have full accessibility to the person you hire during and even after you have filed in the event any questions or concerns arise.
Lastly, it should be common knowledge that you should never sign a blank form. And before signing a completed one, ensure you understand everything on the form. Review it, ask questions, and confirm the accuracy of the data before signing the dotted line. One would assume that filing each year is very black and white, but a tax consultant proves to be worthy by having knowledge of the gray areas. Based on experience and education, they know best how to interpret IRS rulings.