How to Select a Professional Tax Preparer
According to the IRS, 60 percent of Americans seek the advice of a tax preparer or utilize tax software when filing their taxes. If you decide to pay someone to help you prepare your tax return, it is important to choose that preparer carefully.
“As a taxpayer, you’re legally responsible for what’s on your own tax return, even if it was prepared by someone else,” said Phil Brockhaus, CPA, shareholder with Peters & Chandler PC in Oklahoma City and president of the Oklahoma Society of Certified Public Accountants. “Signing a return that’s incorrect can lead to problems in the future.”
Beginning Jan. 1, 2011, the IRS began requiring preparers of individual tax returns to register with the government and pass a test to prove their competence. However, Certified Public Accountants (CPAs) are exempt from this rule because they have passed the Uniform Certified Public Accountant Examination, have met additional state education and experience requirements for certification, and must adhere to a strict code of ethics. CPAs are required to complete continuing education to maintain their certification and are regulated by the state board of accountancy.
It’s important for taxpayers to find qualified tax professionals if they need help preparing and filing their tax returns. Unqualified tax preparers may overlook legitimate deductions or credits that could cause you to pay more tax than you should. Unqualified preparers may also make costly mistakes causing you to incur assessed deficiencies, penalties and interest.
Here are some suggestions to consider when hiring a tax professional:
A paid preparer must sign the return as required by law.
Avoid preparers who claim they can obtain larger refunds than other preparers. If your returns are prepared correctly, every preparer should arrive at substantially similar numbers.
Beware of a preparer who guarantees results or bases fees on a percentage of the refund amount. A practitioner may not charge a contingent fee (percentage of your refund) for preparing an original tax return.
Reputable preparers will request to see or spot check your receipts. They will ask you questions to determine the legitimacy of your expenses, deductions and other items. By doing so, they have your best interest in mind and are trying to help you avoid penalties, interest or additional taxes that could result from an IRS examination.
Choose a preparer you will be able to contact any time throughout the year and who will be responsive to your needs.
Investigate whether the preparer has any questionable history with the Oklahoma Accountancy Board (www.ok.gov/oab_web/) or whether the preparer is a member of a professional association, like the OSCPA, that provides or requires its members to pursue continuing education and holds them accountable to a code of ethics.
Determine if the preparer’s credentials meet your needs.
Consider who can offer the most help.
Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters including audits, collection actions and appeals. Other return preparers may represent taxpayers only in audits regarding a return that they signed as a preparer.
Tax evasion is a crime, punishable by up to five years imprisonment and a $250,000 fine. Remember, no matter who prepares a tax return, you as the taxpayer are legally responsible for all of the information on that tax return. Ensure all information on the return is correct before you sign.
As a bonus this year, you’ll have a few extra days to file your return. The IRS will be closed on Friday, April 15, 2011. As a result, the filing date for federal income tax returns due in 2011 will be Monday, April 18, 2011. If you have a state individual income tax return to file, the deadline will also be April 18, but all others will be due the 15th, according to the Oklahoma Tax Commission. For additional state filing questions, call the Oklahoma Tax Commission at (800) 522-8165.
“The U.S. tax code has become increasingly complex,” Brockhaus added. “A CPA has the most comprehensive and up-to-date knowledge of tax laws and filing procedures to help you find solutions for your unique situation.”
If you would like to find a CPA in your area, contact the OSCPA, or visit www.KnowWhatCounts.org for a FREE CPA referral, which also includes a free 30-minute consultation.