When it comes to finding a tax preparer, people’s biggest concern is finding someone to get the biggest tax return. But how do you really know if someone’s capable of doing that? In finding the right person, you’ll always want to begin by asking them three questions:
1. What is Your PTIN?
A person doesn’t have to be credentialed as a CPA or attorney to file your taxes. But if you’re going to pay someone to file your taxes for you, be aware that the IRS must have first issued them a PTIN (Preparer Tax Identification Number). If filing electronically, the IRS must have issued them an ETIN (Electronic Tax Identification Number). Checking someone’s PTIN or ETIN helps prevent identity theft and fraud, which is becoming an increasing problem.
2. What Credentials Do You Have?
The process for obtaining a PTIN or ETIN is fairly basic. The IRS asks simple questions like name and social security number to conduct a background and credit check. So do you really need to pay the higher fees of a credentialed professional to help you prepare your taxes?
For most cases, we highly recommend it. Someone with credentials had to undergo a certain amount of education and/or training to assist you, meaning they are at least minimally competent to get you the highest return possible.
Credentialed professionals include the following:
~Certified Public Accountants (CPAs) can help you with your federal tax return as well as state filings within the state(s) in which they are licensed. To obtain their license, they must pass a national exam and meet their local jurisdiction’s educational, ethics, and other requirements. Most, if not all, states maintain a public list of licensed CPAs that you can access online.
~Enrolled Agents (EAs) can help you with your federal tax return as well as file a return for any state in the nation. For instance, at Tax N Book, we have EAs on staff who can file tax returns for customers in whatever state they reside. EAs can also represent you before the IRS in lieu of an attorney. This is especially helpful in the event of an audit and other matters. As such, EAs must undergo vigorous vetting with the IRS through an exam. They may also be vetted through having previously worked for the IRS. EAs maintain their licenses with the Department of Treasury through continuing education, which includes classes on ethics. You can verify the status of an EA by contacting the IRS directly.
~Attorneys sometimes specialize in tax preparation in addition to other financial planning matters. They are licensed to practice federally as well as in each state they maintain their bar license (although some states have reciprocity). Each state has its own licensing requirements, which include having completed law school, passing an exam, and taking continuing education classes. You can verify an attorney’s credentials through a state bar website.
3. Will You Help Me with Any Issues Once Tax Season is Over?
Some tax preparers only pop up when tax season hits, or only are in the business of filing tax returns. Even if they’re legitimate, what happens if something gets filed incorrectly? You’d probably want your tax preparer to explain their mistake to the IRS, instead of scrambling to figure out what went wrong!
An agency who offers more financial services can offer advice on saving money in ways other than your tax return. And, with the new tax bill that just passed, the advice of an expert will prove to be invaluable very soon. Don’t be shy – contact Tax N Book today!