Advice when hiring a tax professional.
Ask the tax professional about their credentials, and verify the credentials before enlisting them for help.
A tax professional should be an Enrolled Agent, meaning they have had an IRS background check done on them and that they have also passed a test covering all aspects of taxation. In order to achieve this milestone the individual will need to continuing education classes every three years. Enrolled Agents are also held to the highest standard when it comes to ethics and serving the customer.
When someone has this certification they can cover and represent on all different types of taxation matters. For example, they will be unrestricted as to which taxpayers they can represent and which cases they can address. An agent can help with income taxes, property and much more. When needed they can also represent their clients in all different IRS offices and they have no restrictions as to what they can do.
A tax professional can also be a CPA (Certified Public Accountant) or a tax attorney. Those are the only types of professionals that are allowed to provide you advise and support on your outstanding tax matters. They will also be allowed to state their case and practice before the Internal Revenue Service. Also, note that attorneys and CPAs are limited to practicing in those states where they are licensed, so be sure you check this as well before signing any contracts or agreeing to terms. On the other hand, Enrolled Agents can provide help with taxes and practice in any state, so this is one of the main differences between a CPA/attorney and an Enrolled Agent.
Keep your costs under control.
Tax professionals will charge you either a flat fee for providing help on your taxes or they will change you an hourly rate for services rendered. You want your tax representative to focus on providing plans, options and strategies as well as negotiating with the IRS. You do not want them spending time on routine data entry work or other paperwork. Any time spent on these activities will be billed to you as well and consumers do not receive as much value add from that. A good tip is to ask your tax professional what IRS forms and paperwork you can complete yourself to minimize the your overall fee that you will need to pay.
Research them thoroughly
Check with the better business bureau. Ask them for and check their references. Any legitimate tax professional will provide you with numerous references and call them at random.
Review their fees. Most professionals will work on a contingency basis when challenging your home property tax bills or some other matters. That means that you pay them only if they save you money on your home’s assessment. When it comes to providing support for an audit or an IRS issue, some companies will only charge you for a portion of how much they can settle your dispute for. In general, any professional who works on a contingency basis is usually less costly to the client.
Other steps to take when selecting a tax professional
As part of the process in selecting a representative, some or all of the following are additional steps you should considering taking.
- Ensure the person representing you signs any forms as well.
- Make sure the preparer is accessible, even after they complete and file any paperwork on your case.
- If the case does eventually turn into a lawsuit, then ensure the tax professional has access to an attorney that you can use for your case.