choosing an accountant

Below is an article from the Boston Area BBB on how to choose a tax preparer.  They do not have the article online, but the BBB gives permission to repost as long as proper credit is given (or at least they use to when I asked).  So I've pasted the article below.

Internal revenue has a couple articles about choosing a tax preparer.  While not extremely indepth, they do point out some legal aspects of tax filing you should be aware of when choosing an accountant.  Internal revenue has a stupid history of changing article id numbers.  So please let me know if either of these links are broken and I'll find the current address.,,id=133088,00.html,,id=202123,00.html

Kerry Kerstetter, who calls himself "The Tax Guru", has written some excellent points on choosing an accountant.  While the article isn't new, the info is still relevant.  Being an older page (Kerry's newer stuff is on his blog) the design is a bit dated.  Some have complained he seems arrogant, but sometimes the truth, when stated bluntly, rubs people the wrong way.  The article is well worth reading.

Choosing A Tax Preparer

BOSTON - It’s tax time again! Every year, Americans put off doing the inevitable taxes, and every year there are complaints to the Better Business Bureau about tax preparers. To help avoid problems and frustrations this year, the BBB has the following advice this tax season:

Before you choose an income tax preparer, you should decide what type of services you need and how much you can afford to pay.

  • Do you want to save time, money, or both?
  • Is it important that you have the same person prepare your taxes next year?
  • Are you looking for someone to just compute your tax return?
  • Or, do you need someone to act as a financial advisor year round?

As a general rule, the more complex your tax situation is, the more you will require the advice of someone with specialized experience. For recognized professionals, such as accredited tax advisors, accredited tax preparers, certified public accountants or CPAs, and tax lawyers, you may assume a level of special training and experience, although you should inquire about their primary area of practice. For other tax preparers you will have to determine the level of their expertise.

Research a tax preparer just as you would any other service provider. Ask for referrals from friends and colleagues, or contact the national or state associations and societies and ask for their recommendations. Then interview the preparer, either over the telephone or drop by for an office visit. Before you hire a person to prepare your taxes, be certain that he or she has the expertise you are searching for, and can provide the services you need at a cost you can afford. Of course, check with the BBB for a Reliability Report.

Discuss the cost of the service and ask for an estimate of fees. The fees should be based on the complexity of the return, and never on the size of the tax saving or refund. A tax preparer never should guarantee a refund before completing a return. Some preparers offer immediate payment of returns, for a fee. Keep in mind that this is a loan. If you accept the offer, be certain that you are aware of the terms. Read the fine print before signing any agreement.

Ask the preparer the following list of questions to help you evaluate whether he or she is right for you and your tax situation:

  • What tax preparation training and experience does the preparer have?  Is the preparer an enrolled agent, accredited tax advisor or preparer, certified public accountant or tax lawyer?
  • Will you be interviewed by the same person who will prepare your return? The interview process is important in recognizing deductions, adjustments and tax credits. You will want more interaction than just having a clerk fill in lines on the form.
  • Does the preparer have any experience in your area? Certain tax situations lend themselves to specialization. A small business owner, self-employed individual, physician or childcare worker, for instance, can benefit from a preparer's in-depth knowledge of their specific field.
  • How does the preparer check the accuracy of his or her work? Does the return pass through an audit by one other person, or several people? Is it checked manually or by computer? Is the return checked simply for mathematical errors, or are errors in the interpretation of tax rules also verified?
  • Can the preparer be reached during the year? In the event that your return is audited, you will need to contact your preparer.
  • Can the preparer represent you in an audit? Only EAs, CPAs and lawyers are authorized to represent you before the IRS. Determine that your preparer is willing to represent you should it become necessary, and at what cost.
  • How is the fee determined? Most tax services have a set schedule of charges according to the number of forms that are used and filed. Professionals usually charge by the hour, but fees can range across the board from one individual to another, so be certain you have a clear understanding of the cost, and what it includes. Ask for an estimate.
  • What is the turnaround time for the return? Will all the forms be completed at the end of the interview session, or will it be necessary for you to return to pick them up? How long will the process take?

Meeting with Your Tax Preparer

The IRS has developed a strict set of rules and regulations that a tax preparer must follow. Expect your preparer to follow these rules. Remember that ultimately you are responsible for the tax return you file.

Your preparer should review the list of taxable deductions with you. Even if you feel that few of these credits apply to your situation, it is worth the time to discover as many taxable allowances as you can. If the preparer suggests any inappropriate deductions, you should retrieve your information and seek help elsewhere. Be wary of a preparer who asks you to mail in your information without discussing it in detail with you.

IRS regulations state that the preparer must sign the return and provide a social security number and/or federal identification number, and office address. As a taxpayer, you are required to furnish this information as well.

However, never sign a blank return; it is like signing a blank check and it is illegal. Also, do not sign a return that has been filled out in pencil.

Ask the preparer to retain a copy of your return for three years, the length of the statute of limitations in most tax cases. A tax return is a confidential document and should not be shown to anyone other than an IRS agent without your prior consent.

After you receive your completed return, examine it carefully before signing it. Is all the information correct? Is all the information you gave your preparer on the form? Verify that the income listed on the form matches your W2 forms and other income-related documents. If you have any questions, contact your preparer before mailing in the return.

If you are fully satisfied that the form is properly and completely filled out, sign it and mail it to the IRS. Keep a file containing a copy of your return and relevant documents for at least three years after the filing date.

Tips to Remember
  • Be honest with your tax preparer. A preparer will not act as an auditor; he or she will not necessarily ask to see all your documents or request proof of the figures you give.
  • Although a tax preparer is subject to a penalty for negligence of intentional disregard of an IRS regulation, he or she is not held responsible for processing false information which he or she took to be true.
  • The preparer cannot knowingly omit information provided by the taxpayer.

Ultimately, it is your name goes on your tax return, and it is your name on the IRS file. The penalty for filing false information to the IRS is severe. Be sure to claim all the deductions for which you are eligible, but be honest.

© 2/13/1998 Better Business Bureau®, Inc.