Here are thee questions to ask when vetting a potential tax preparer.
What Are Your Professional Accreditations?
Anyone with a Preparer Tax Identification Number issued by the IRS can prepare a return on your behalf. But there are three main professional categories that require more extensive education and licensing: a tax attorney, an enrolled agent, and a certified public accountant (CPA). You may only need an attorney for more complicated tax planning or for navigating a dispute with the IRS. Enrolled agents are licensed by the IRS and can represent you before the agency. CPAs have met educational and testing requirements to earn the designation and can also represent you before the IRS. For any tax preparer, verify their license or accreditation is current.
What Type of Businesses Do You Specialize In?
Asking colleagues for recommendations is a good place to start when trying to find a tax preparer that has experience with your industry and business type. You can also ask tax preparers if they have references specific to your industry. Knowing they have experience with returns like yours gives you piece of mine that they’ve already encountered any issues common to your industry.
How Do Your Fees Work?
Two common fee structures are flat fee and hourly. A tax preparer should be able to give you an estimate after an initial consultation and review of past returns or current tax documents. Take care to vet guarantees of larger returns or fees based on a percentage of the return. You are legally responsible for the return and could bear risk for illegitimate claims.