4 Tips to Help You Choose a Tax Preparer

As your financial life becomes more sophisticated, there may come a time when you need to bring in a tax professional to help with planning and preparing your taxes. Because you’ll be sharing sensitive personal and financial information, it’s important to work with a qualified and trusted professional who can provide the guidance you’re looking for.

Here are a few tips to help you with your search.

1. Choose a tax professional with a valid Preparer Tax Identification Number (PTIN)

By law, the IRS requires all paid tax preparers to apply for and maintain a Preparer Tax Identification Number (PTIN). The PTIN lets you know that the tax preparer is authorized to handle your federal tax return. Paid tax preparers must sign and include their active PTIN on any tax return they prepare.

Need to check whether your tax preparer has an active PTIN? The IRS maintains a list of PTIN holders, where you can look up an individual by state.

2. Review their qualifications and credentials

While any tax professional with a PTIN is authorized to prepare federal tax returns, not all tax preparers are created equal. Some will have more education, experience, or expertise in certain areas of tax preparation. Tax professionals also have different degrees of “representation rights.”

Some have unlimited representation rights, while others have only limited representation rights. For example, enrolled agents, certified public accountants, and attorneys have unlimited representation rights, meaning they may represent you before the IRS on matters such as appeals, audits, and collection issues.

Generally speaking, tax preparers without those professional credentials only have limited representation rights. That means they can only represent their clients (those whose tax returns they’ve prepared and signed) in select circumstances – such as going before revenue agents, customer service representatives, or other similar IRS employees (e.g., Taxpayer Advocate Service). Visit the IRS website for more details.

Be aware: Even if you use a tax professional to help prepare your returns, you’re ultimately responsible for making sure that the tax filing is accurate. So it’s important to do your research and choose someone who can competently handle your tax needs (e.g., tax prep, tax advisory, bookkeeping, etc.).

3. Ask about their availability

Communication is important in any relationship, and it’s no different when it comes to you and your tax preparer. As you shop around and talk to different tax professionals, get to know their communication and working style.

Here are some questions you may want to ask:

• How responsive are they during tax season?
• Would they be able to meet in person to answer your questions or concerns?
• How much time would they need to complete your return?
• Will they maintain any tax records for you?

In short, you’ll want to know how much support you can expect from them during and after tax season.

4. Understand the service fees

Some tax professionals may charge you an hourly fee, and the rates can vary widely based on their credentials. Others may opt to charge you based on the types of tax services they provide or the number of forms they have to prepare for you. 

Good to know: The IRS recommends that taxpayers avoid tax preparers whose fees are based on a percentage of your refund.

Other good practices to keep in mind

• Never sign a blank tax return. Your tax preparer should never ask you to do this. It is ultimately your responsibility to ensure that you’re filing a complete and correct tax return.
• Always do a final review of your completed return before signing it. This is the time to ask questions if anything is unclear or looks incorrect. Remember, once you sign your return, you are responsible for the information on it.
• Review your refund details. If you’re getting a refund, double-check that the bank account information on the return is correct and make sure you’re the one receiving the refund directly – not your tax preparer.
• Watch out for certain red flags. Be wary of tax preparers who don’t have a valid PTIN as well as those who won’t sign a tax return. The IRS also recommends avoiding anyone who claims they can help you get a bigger refund than other tax services providers.

Visit the IRS website for more helpful tips. Although it doesn’t happen often, if you suspect your tax preparer of misconduct or fraud, you can report them directly to the IRS using Form 14157.