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Category: Articles » Finance » Taxes » Article » Article Code

4 Critical Things You Should Demand From A Tax Professional

4 Critical Things You Should Demand From A Tax Professional 1.COMPETENCE AND CREDIBILITY It is very important that you research the credentials of the person you have preparing your taxes. Look for credentials such as enrolled agent or CPA, which will give you some assurance that the preparer has had adequate education and meets ethical standards. Also, make sure that the tax preparer you choose can and will take the time to research any issues they may not be familiar with. They need to be able to call an expert, or have access to technical ... read more

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1.COMPETENCE AND CREDIBILITY

It is very important that you research the credentials of
 
the person you have preparing your taxes. Look for
 
credentials such as enrolled agent or CPA, which will give
 
you some assurance that the preparer has had adequate
 
education and meets ethical standards. Also, make sure that
 
the tax preparer you choose can and will take the time to
 
research any issues they may not be familiar with. They
 
need to be able to call an expert, or have access to
 
technical resources that can help answer any questions they
 
may have.

In addition, use a reputable tax preparer that signs your
 
tax return and provides you with a copy for your records.
 
Also, consider whether the individual or firm will be
 
around to answer questions about the preparation of your
 
tax return, months, even years, after the return has been
 
filed.

2.TECHNICAL EXPERTISE AND EXPERIENCE

While most tax preparers know a little about tax laws, many
 
know almost nothing about technical issues. They need to
 
have the technical knowledge to even know where to look,
 
and the experience to know what to look for.

CPAs, accountants, and bookkeepers, without a tax
 
specialty, may not have the time, experience, education,
 
insight or technical skill to deal with the technical
 
analysis and identification of issues necessary to
 
effectively prevent avoidable tax overpayments.

It is important that the tax expert you choose not only has
 
a number of years of experience tackling technical issues,
 
but also a good technical knowledge base to draw from.

3.THOROUGH KNOWLEDGE OF THE LAW

In this industry, it is what you don't know that costs you
 
money! There are literally volumes and volumes of laws that
 
can potentially affect the amount of taxes you end up
 
paying - and those laws change constantly. What most
 
taxpayers don't realize is that even small changes can
 
affect your taxes in a big way. Money Magazine's tax test
 
has shown that unfortunately, very few tax preparers
 
actually take the time to learn the hundreds of new tax
 
laws released every year.

This is a total disservice to the taxpayer because the
 
result is a representative who is unable to identify a tax
 
issue, tax law, or fact that could support and justify a
 
reduced tax liability. For this reason, the tax expert you
 
choose should have thorough knowledge of current laws and
 
stay continually educated on all new and updated tax laws
 
and guidelines.

4.ATTENTION TO DETAILS

Most CPAs prepare tax returns for approximately three
 
months out of the year and spend the balance of the time
 
preparing books, records and financial statements. This
 
makes it very difficult to keep up with the ever-changing
 
tax law, especially on a part-time basis. Between February
 
1st and April 15th, the average tax preparer completes
 
about 480 returns. With this overwhelming workload it is
 
nearly impossible for an accountant to take the time during
 
tax season, to thoroughly evaluate your tax situation and
 
find all the latest tax laws and guidelines that can be
 
applied, to help reduce your tax liability.

Find a tax expert that not only keeps up with current tax
 
laws and changes, but also is not under the same time
 
crunch and pressure. This way they can take the time to
 
closely scrutinize your tax situation and aggressively look
 
for every deduction that can be applied.

One of the best ways, however, to ensure that your tax
 
preparer is doing the best possible job for you, is to get
 
a qualified second opinion from a 'tax expert" who
 
specializes in reviewing taxes and looking for areas where
 
you may be overpaying.

"The March of Tax Changes in Recent Years Has Made It
 
Easier to Err, and the New Tax Law Will Only Aggravate the
 
Problem."(US News and World Report)

Taxes may be one of the things you can be sure of in life,
 
but the same can't be said of tax laws. They change
 
constantly. The recent tax law changes include the most
 
sweeping changes in 15 years. The new legislation makes 441
 
tax law changes spread through 189 sections of the Internal
 
Revenue Code.

"In June 2001, for instance, President Bush signed into law
 
the Economic Growth and Tax Relief Reconciliation Act of
 
2001. The Act significantly alters the tax treatment of
 
several major financial issues, including income,
 
retirement savings, educational savings and estate
 
planning. It's a complex law that amounts to over $1
 
trillion in tax cuts, but most of those cuts are being
 
phased in (and in some cases phased out) over a 10 year
 
period, and the entire act itself will end in 2010. Between
 
now and then, however, Congress may pass other measures
 
that either extend provisions in the Act or eradicate them
 
once the law sunsets." (money.cnn.com/Personal Finance,
 
Oct. 2002)

Now, It's More Important Than Ever To Get A Second Opinion
 
On Your Taxes to Ensure You Are Not Cheating Yourself and
 
Giving Uncle Sam a Windfall.

A second opinion will not only give you the peace of mind
 
that your tax preparer is doing the best possible job they
 
can for you, but more importantly will ensure that you are
 
not paying one penny more than your fair share.

The IRS has $4.8 billion dollars of taxpayers' overpaid
 
taxes, sitting in a trust fund in the U.S. Treasury – but
 
it is not necessarily gone for good. Taxpayers can file
 
amended returns up to three years later, and any money
 
refunded is paid back with interest. (ABC News, April 12,
 
2002)

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