Tax professionals have varying levels of skills, education and expertise. Furthermore, not all tax professionals have the right to represent taxpayers before the IRS, such as during an audit. Taxpayers should be aware of the credentials, qualifications and extent of service each prospective professional provides before obtaining their service.
Enrolled agents, certified public accountants and attorneys have unlimited representation rights before the IRS and may represent their clients on any matters including audits, payment issues, and appeals — regardless of whether they prepared the return in question.
Non-credentialed preparers currently have limited practice rights. They may only represent clients whose returns they prepared and signed, but only before IRS revenue agents, customer service representatives and similar IRS employees, including employees in the Taxpayer Advocate Service. The IRS has launched a public directory to help taxpayers determine return preparer qualifications.
What Do You Gain From Having a Tax Professional?
Aside from the benefits listed above, you gain several benefits by having a tax professional prepare your tax returns. Peace of mind is generally the biggest benefit that you gain. By having us or another tax professional prepare your returns, you are able to have the confidence that they are done correctly and efficiently. Additionally, you will gain the ability to have someone represent you in the event of an audit. Yes you could always hire someone after the fact should you need to, but having the person who prepared the forms representing you allows them to have in-depth knowledge about every aspect of the return and guarantee that they will fight as hard as possible to win on your behalf.
As tax professionals, we are bound by law to follow certain rules and guidelines enforced by the IRS. One of these is document retention. You can think of us as your own personal backup system.
Credentialed tax return preparers with unlimited representation rights include Attorneys, Enrolled Agents, Enrolled Retirement Plan Agents, Enrolled Actuary, and Certified Public Accountants. Our firm falls under the category of Certified Public Accountants.
Certified Public Accountants or CPA’s are individuals with that are licensed by state boards of accountancy, the District of Columbia and U.S. territories, and have passed the Uniform CPA Examination. They have completed a study in accounting at a college or university and have also met experience and good character requirements established by their boards of accountancy. In addition, CPA’s must comply with ethical requirements and complete specified levels of continuing education to maintain an active CPA license. CPA’s may offer a range of services. Some CPA’s specialize in tax preparation and planning. Even if they do not specialize in taxes, in order to pass the Uniform CPA exam, candidates must have extensive knowledge of federal taxation. The extent of information is generally much deeper than that of non-credential tax return preparers.
Additionally, there are two types of non-credentialed tax return preparers, each with limited representation rights which are the annual filing season program participants and other tax return prepares. While these types of preparers may be less expensive in some cases, they carry the disadvantage not being able to represent clients they did not prepare returns for nor can they represent clients regarding collection or appeals matters. This is not to say that you shouldn’t go to non-credentialed preparers. In fact, preparers such as seasonal tax return prepares are generally a good way to go for very basic and simple tax forms on a budget. Regardless of your choice, you should always inquire about the level of education of all tax preparers have so that you can assess their abilities whether they be credentialed or not. All credentialed individuals should have their information available to the public. This is the case with CPA’s and for convenience, we even provide a page with the most current certifications we have here at Robert Loe & Associates. This information is updated as certifications expire or are renewed (generally the latter).