Four 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 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)