Finding “The One”: Hiring the Right Tax Professional

Finding the perfect CPA can be daunting, but here are some tips.

With the filing season crunch over, now is an excellent time to sit down with your tax professional and spend some quality time reviewing and modifying your tax strategies.  If you don’t have a tax professional, it’s always a good idea to hire one!  Much like hiring a mechanic to work on your car, or a realtor to sell your home, it pays in the end to hire a professional to assist in your tax planning and preparation.

When hiring a tax professional, there are some tips to follow to ensure you choose wisely.

#1  Check qualifications.  Do they have a Preparer Tax Identification Number (PTIN)?  If they’re preparing taxes, IRS regulations now require all paid tax preparers to have a PTIN.  Do they belong to a professional organization that requires continuing education, such as a CPA, Enrolled Agent, or attorney?

#2  Check their history.  Check for any questionable history with the Better Business Bureau.  Also, check for any disciplinary actions and licensure status through the state board of accountancy (CPAs), state bar association (attorneys), or the IRS Office of Enrollment (Enrolled Agents).

#3  Ask about their service fees.  If they’re basing their fee on a percentage of your refund, or claim they can obtain a larger refund than other preparers, it’s a good idea to avoid them.  Also, always make sure any refund due is sent to you, or deposited into an account in your name.  Avoid anyone who would have you deposit part or all of your refund into their account!

#4  Do they offer electronic filing?  The IRS requires any paid preparer who files more than 10 returns to file electronically, unless the client opts to file a paper return.  If they’re suggesting or insisting on filing a paper return, ask why.

#5  Are they accessible?  Can you get ahold of them after the return has been filed?  Are they available to meet outside of tax season?

#6  Do they ask to see your records and receipts?  If they are willing to electronically file your return before you’ve provided your W-2 or other documents and receipts, they’re violating IRS rules.

#7  Are you allowed to review your return before signing it?  Regardless of who prepares your return, ultimately YOU are responsible for any errors or omissions it contains.  Also, make sure you will receive a copy of your return.  It should go without saying, but avoid preparers who ask you to sign a blank return!

#8  When possible, get a referral.  Ask friends, family, and colleagues if they know of someone they can recommend.  Even if you’re new to the area, you can check with your state’s CPA society to find a CPA near you.

#9  Interview prospective tax professionals.  Even during tax season, they should have time for at least a 20-30 minute phone call to discuss your needs and situation.  If they aren’t willing, or insist on charging you, look elsewhere.

#10  Do you have any special requirements?  If you have a small business, make sure they know business accounting.  Likewise, if you have rental property, look for someone experienced in this area.

#11  How much will they charge?  You probably won’t get an exact number, but they should at least provide you with an estimate, as well as the conditions that might factor in to any increase or decrease in the charge.

#12  Do they have room for a new client?  Will they file your return in a timely manner?  And, most importantly, will they have time to meet with you during other times of the year if needed?

In addition, here are some red flags to watch out for when searching for a tax professional.

#1  Am I going to a night club or getting my taxes done?  A tactic becoming more commonplace these days is offering things such as free food, cash, or even free Beats Headphones just to come have your taxes done.  Low rates and fancy promotions usually come with hidden fees that quickly add up.  Remember the old adage: If it sounds too good to be true, it is!

#2  They claim they can get you your refund faster if you bring in your last pay stub.  If so, they’re in violation of IRS regulations (see #6 in the previous section).  If they’re willing to break those rules – and flaunt it – what other rules might they be violating?  Steer clear.

#3  They guarantee a refund, or that you won’t owe, before they see your tax documents.  Even seasoned pros can’t guarantee that without running the numbers.  The goal should be to get your taxes done right, not to get a refund.

#4  They imply endorsement by the IRS.  The IRS does not endorse ANY preparer or firm, period.

#5  They demand to be paid a set amount without presenting a breakdown of fees and charges.  If they won’t tell you what you’re paying for, move along.

These lists may seem daunting at first, but remember – you’re putting your finances and trust into someone who should be a professional.