How To Choose A Tax Pro
 By Terry M. Blair

It’s amazing.

Smart small-business owners don’t hesitate for a moment to call on an expert when the computer crashes. Yet many consider themselves competent to navigate the mysteries of the ever-changing, ever-growing, ever-more-complex Internal Revenue tax code.

Computers are complicated devices, but they pale in comparison to the intricacies of the 54,000-page, 2.8 million-word tax code. Unless your business finances are ultra-simplistic, or you have spare non-billable hours to spend keeping abreast of the countless changes in tax laws every year, it’s probably worthwhile to hire a tax preparation expert.

So, if you’re being penny-wise by monitoring operational expenses, don’t be pound-foolish by turning over more than you must to the government, simply for lack of expert advice.

Your Choices
First, you need to know that any fool can hire out as a tax preparer. A shingle on the door and an ad in the newspaper don’t guarantee competence. Some uncertified preparers are skilled and knowledgeable, but your most reliable choice will be from one of these three professionals:

• CPA: A certified public accountant has a college degree and must be certified by a state examining board to prepare companies’ audited financial statements. CPAs are not merely accountants in a company. They’re independent professionals with a government stamp of approval. CPAs may also go beyond annual tax preparation and provide ongoing advice for small businesses. They are authorized to represent taxpayers in IRS audits.

• Enrolled Agent: This specialist in tax law must have five years of experience working for the IRS or pass a U.S. Treasury Department examination to be certified to represent individuals and businesses before the IRS. Enrolled agents also can make claims against the government on behalf of taxpayers.

• Tax Attorney: This brand of lawyer doesn’t merely have a law degree, but also has a master’s of taxation from an accredited law school. These attorneys are certified to handle tax issues, and usually accredited.

Questions To Ask
Choose your tax preparer as you would any professional service provider. Ask for credentials. It’s unwise to trust your returns to an inexperienced preparer. How long has the person been preparing tax returns, and what types of returns? For businesses like yours? Ask if support will be provided should you be audited, and what form that support will take.

Be sure to compare prices because professional fees vary. Learn the basis for fees. Are they charged by the hour? By the number of forms to be prepared and completed? By the overall complexity of the return?

Always demand references.

To start your quest, ask business owners you respect for the name of a tax preparer they can personally recommend. Be sure to check reputations with the local Better Business Bureau, or the state’s regulatory agency for CPAs or the state bar association for attorneys, as appropriate.

You should also determine whether tax business is a seasonal or year-round vocation for the preparer. You may have tax questions or problems arise that can’t wait until next year for a consultation.

Words Of Advice
Tax preparers are swamped from January to April 15, so getting all your answers may be difficult during this crunch period. If it’s too late in the game for you to cover all these bases this year, resolve to gear up far in advance for the next tax season. If there’s anything certain, it’s that the tax man will want your money next year too.

Some words of warning.

The IRS cautions that taxpayers can be vulnerable to slick-talking “tax experts.” Beware of choosing a tax preparer based on hyped advertisements or promises of huge refunds. Reputable preparers can’t promise anything other than their own due diligence. Ultimately, even when using certified tax preparers, it is you, the taxpayer, who is responsible if an audit or problem develops.

(Posted March 2006)

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