Nevada County Picayune and Gurdon Times Newspaper Archive

SELECTING A TAX PROFESSIONAL

Help! It's tax time; the time of year most Americans dread even if they're expecting a refund.

Organizing records, sorting through canceled checks and collecting 1099s and W-2s is more than enough to drive anyone to the medicine cabinet for a dose of antacid.

If the chore of preparing your tax return is more than you can bear and you opt to hire a tax preparer, the Cooperative Extension Service, University of Arkansas has some advice.

First of all, select a tax preparer as carefully as you would a doctor, lawyer or any other type of professional. Although your life may not be at risk if your tax professional makes a mistake, you'll feel as if your world has come to an end if you are ever audited by the IRS.

Tax preparers differ greatly in education and training. Neither the IRS nor most states license tax preparers. Almost anyone can call himself or herself a tax return preparer.

Sound scary? You bet. Especially when you consider that you are the person ultimately responsible for the accuracy of your return regardless of who completes the tax forms.

Major categories of tax preparers include Enrolled Agents (EAs), lawyers, Certified Public Accountants (CPAs) and tax return preparers.

An Enrolled Agent (EA) is a tax preparer who is permitted to practice before the IRS in all matters. The designation "Enrolled Agent" is earned by either passing a comprehensive IRS exam or by having at least five years experience working for the IRS. EAs are also required to continually participate in educational programs to retain their designations.

A tax attorney is a lawyer trained to do a variety of tax related work including complex tax returns, estate planning and IRS dispute resolution. Like EAs they can practice before the IRS. If you choose to have a lawyer complete your income tax return, you may want to look for one with a special tax law degree (LL.M.-Tax).

A Certified Public Accountant is also authorized to represent you before the IRS. CPAs are accountants who have passed a series of rigorous examinations and licensed to do complex accounting, audit work and prepare tax returns.

Individuals who simply call themselves a "tax return preparer" may or may not have special training or experience. Although he or she may accompany you to an audit, a tax preparer cannot represent you before the IRS unless he or she is an attorney, CPA or EA.

Should you decide to use the services of a tax preparer, it's a good idea to check out their credentials. Ask about any formal training which they may have taken or any special designations they have earned.

The Accreditation Council for Accountancy and Taxation (ACAT) awards the Accredited Tax Preparer designation to individuals who have passed a rigorous course of study and fulfilled all of the requirements to earn the Accredited Tax Preparer (ATP) mark.

Regardless of the type of professional you choose to complete your tax return, one thing is for sure. It's going to cost.

Most professionals charge between $25 and $250 per hour. That's why it's necessary to shop around and have an understanding of the fee up front.

Above all, select a professional who takes the time to talk with you about your unique tax situation, asks lots of questions about your finances and responds to all of your questions using terms you understand.

Demand service for your fees.