Taxpayers are expected to file and pay their taxes to the IRS on time every year. Many taxpayers find preparing and filing their own simple tax returns comfortable. On the other hand, taxpayers commonly seek professionalism when dealing with complicated returns to save time and ensure accuracy. Choosing the right tax professional will surely have a meaningful impact on your ongoing financial status. Here, we will look at the most important considerations to assess when you’re searching for the right tax attorney for you.
Are tax attorneys my top Choice?
The IRS separates tax experts into two categories.
The representation rights of some professionals are limited, such as Annual Filing Season Program Participants and Preparer Tax Identification Number (PTIN) Holders. U.S. News and World Report stated that only about one-third of active PTIN holders have professional credentials. That implies that although some PTIN holders have experience in tax preparation, they haven’t “demonstrated any tax competency to federal or state regulators.”
Other tax professionals have unlimited representation rights, such as Enrolled Agents, Certified Public Accountants and tax attorneys. These experts hold credentials regulated by industry watch dogs. We’ll focus on tax experts with unlimited representation rights for the purposes of this article.
Tax Attorneys
An aspiring tax attorney acquires most of their education and training in law school. Law school teaches students legal methods, civil procedure, criminal law, constitutional law and much more. Once law school is complete and the bar exam is passed, attorneys may center their focus on tax law. Consequently, tax attorneys are best for taxpayers who need to be represented in a court of law for tax evasion, fraud, or any related crime.
Enrolled Agents
Enrolled agents are licensed and regulated by the IRS. They explain that the Enrolled agents are subject to a suitability check and must pass a three-part Special Enrollment Examination, which is an exam that requires them to show proficiency in federal tax planning, individual and business tax return preparation, and representation.” In addition, they’re required to complete 72 hours of continuing education once every three years.
Certified Public Accountants (CPA)
CPAs are the most skilled and regulated of the three occupations that have unlimited representation rights with the IRS. They’re licensed by state boards of accountancy after getting an accounting degree and passing the Uniform CPA Examination. They’re required to maintain ethical standards in their practice, as well as meet continuing educational requirements. “As a result, those CPAs that choose to focus on tax tend to have a greater background on certain tax issues than the typical tax professional.”
If I don’t need a tax attorney, how do I choose a tax expert?
Firstly, if you are in a complex situation with the law and the IRS, you should hire a tax attorney. Confirm their credentials and ask questions about their experience before settling on someone to represent you.
If you’re not in trouble with the law, your needs are certainly more suitable for an Enrolled Agent or CPA. Here are some important tips for choosing a qualified and reliable tax professional.
▪ Verify qualifying credentials.
The easiest way taxpayers can verify the credentials of a tax professional they’re considering hiring is to use the IRS’s Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. Just type in your zip code and indicate which credentials you’re looking for, if you choose.
The IRS notes that tax attorney and CPA credentials are self-reported. Although the IRS confirms credentials when they’re reported, they don’t examine their status on an ongoing basis. Taxpayers should also refer to the source of the credential for its most current status.
▪ Ask about office hours and holidays.
Many taxpayers find these details to be unimportant. However, it brings the support you have from your tax expert to awareness. This is especially important if you’re chosen for an audit or have a question about tax planning.
Enrolled agents, CPAs and [tax] attorneys with PTINs can represent you in dealing with the IRS on audits, payments ad collection issues, and appeals. Most of all, qualified tax professionals are available whenever you need their service, not only during tax season.
Avoiding Fraudulent Tax Attorneys and other Tax Expert
The IRS lists 12 of the most common recent tax scams yearly and tags them as the “Dirty Dozen.” With recent tax development in place, several tax laws have been modified. For that reason, many taxpayers are opting to get a tax professional to prepare their tax returns and handle their tax problems. As a result, fraudulent tax professionals have been taking advantage of this situation. In fact, the IRS has even added fraudulent tax preparers on its yearly list of the Dirty Dozen.
With the amount of sensitive identifying information that a tax professional has access to, it’s significant for taxpayers to choose a qualified and trustworthy person or company for tax services. The U.S. Department of Justice and the IRS work in collaboration to curb tax scams by assessing penalties to fraudulent tax professionals and in many cases, prosecute them. As an added measure and as the first line of defense for consumers, taxpayers should be cautious in their selection process for a tax professional.
IRS Guidelines for Choosing a Tax Professional
In spite of who prepares your returns or otherwise stand for you in communications with the IRS, you will be held accountable for wrong information submitted to the IRS on your behalf. For this reason, the IRS gives the following guidelines for consumers in the market for a tax attorney and other tax relief professionals.
✔ Look for a tax professional who’s always available
✔ Make sure he/she has a PTIN.
✔ Request the tax professional’s credentials and qualifications.
✔ Verify his/her reputation by looking at his/her rating at the Better Business Bureau (BBB).
✔ Similarly, check reviews gotten as well as complaints.
✔ Inquire about how service fees work. Fees ought to be a flat rate based on the work and time required to resolve your issue. For instance, a service fee based on the size of a refund is another red flag.
✔ Verify that the tax professional will be e-filing your return. Don’t accept “maybe” for an answer.
✔ Prepare to provide documentation to prove your claims. Any information submitted to the IRS on your behalf should be certifiable in the unlikely case of an audit.
✔ Avoid tax professionals who ask you to sign a blank return. In fact, taxpayers should cautiously review all information on any IRS forms before signing and submitting them to the IRS.