Hiring a tax professional


I get this question quite a bit at various meetings with people.  The statistics say that 70% of people here in the US utilize a tax professional.  It used to be 99% before Turbotax.  I have reviewed many returns from Turbotax, I have found only one or two that I would consider utilized the full power of the software.  Most people do not have a clue about  taxes and Turbotax won’t make you a tax expert overnight.  Preparing thousands of tax returns under review of expert tax professionals will.  I’ve prepared a checklist of things to look for in hiring a tax professional:

1) Are they licensed as a CPA, enrolled agent, or some other designation.  CPA is certified public accountant.  Enrolled agent or EA is licensed by the IRS.  There are others but these are the two most important.  IRS is going to require registration of all tax professionals in a couple years.

2) Ask for references.  A couple of years ago, I picked up a client and their tax professional was convicted in a money laundering scheme and in jail and had a prior criminal record.  Be careful , ask questions about their background.  Ask questions about their staff.  If something is odd and they are defensive pull back.

3) Fees.  I charge based on hourly rates and budget for the tax returns based on complexity , software, and use of resources.  High fees do not correlate with good results.  In fact, there are a lot of save tax scams to be aware of , if it sounds too good, avoid it especially if they are asking for upfront fees.

4) Personal service.  This is the key, some larger CPA’s because they are very busy start ignoring clients especially smaller ones, find a CPA that suits your service needs and is attentive to your phone calls, emails etc.  Timing and deadlines is a part of the profession and attention to service is important.

5) Large CPA firms don’t always translate to good service or economical pricing.  Large CPA firms have to maintain a high fixed overhead -rent, salaries etc.  They can entice you with inital good fees but may escalate them in later years.  You may only deal with staff people and never interact with experience (over 10 years) – partners

6) Tax preparer that doesn’t hide in a hole.  Some tax preparers truly hide in holes and only appear in the daylight when they have to or look up something when they have to , try to find proactive ones that will help guide you and your family thru life’s challenges and struggles.

There are probably more items on your checklist.  Feel free to respond.


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