Do you have the Right Tax Return Preparer?


How do you find the right tax return preparer?

  • Compatible with your personality. Do you have the right-tax-return is difficult but perhaps thought is: do you feel comfortable with this person?  Do you believe that this preparer is honest and is looking out for your best financial interests when the tax return is prepared (i.e. claiming all available credits and deductions)?


  • Expectations with preparer. How much work are you willing to pay for?  How much of a role do you want to have with respect to the overall tax preparation (some clients want little to no involvement, while others want to be informed about options and strategies at every stage of the process)?


  • No guarantees of refunds or results. No tax professional can or should guarantee any specific results.  Each taxpayer’s situation is unique.  Take any “guarantee” as a ticket to look elsewhere.


  • Is the fee that the return preparer charging “reasonable” in your area? The preparer should be able to give you an exact cost estimate (or one that should be very close to the final amount) of fees that you will be paying.  Check with friends/family members to compare fees to what they are paying if you think the fees may be too high.


  • Does he/she normally prepare this type of tax return? This is especially important with business tax returns, returns with rental properties, trusts and different forms of investment income.


  • Is the preparer familiar with any State/Local tax returns you may need to file? Even with software, unfamiliarity often breeds mistakes.


  • No contingency fees. If a preparer wants to charge you a % of any refund as his/her fee, this is a major red flag to a possible bad tax situation and should be avoided.


  • Are they licensed? Have they had any complaints/grievances?  Check for any professional credentials, such as Attorney, CPA or EA and check with the respective regulatory agencies- i.e. State Bar, State Board of Accountancy or IRS Office of Enrollment- to see if any complaints have been filed.


  • Availability year round (i.e. after the tax return is filed). The IRS works 12 months per year- so should your tax preparer.


  • Same vision re: aggressiveness of the return. Many areas of the tax laws are unclear (grey areas) and how conservative/aggressive you want to be should be discussed.


  • Check out credentials- education and training. How up to date is he/she on the type of tax issues you and your tax returns may present?  Do they take continuing education classes (usually required as a part of a professional license for an attorney, CPA or EA)


  • How much experience does he/she have? It is important to measure “experience” in reference to the type(s) of tax returns that you need prepared and not simply the number of years that he/she has been preparing tax returns in general.


  • What type of documentation would the preparer need for your type(s) of tax returns? If the preparer cannot immediately run off a list of initial documents needed (such as Forms W-2, 1099, 1098, business income and expenses, copies of prior years’ tax returns, etc.), you should look elsewhere.  Asking for little or no documentation is a major red flag that the preparer should be avoided.


  • Will he/she pay for any mistakes that he/she makes with respect to the preparation? If no, look elsewhere.  A tax professional should always back up his/her work.


  • Will he/she handle any audits? Experience with audits is helpful for all stages of tax planning and preparation.  And if your return is selected for audit, it is helpful to have some experience on your side with respect to any return preparation questions the IRS may have.