What to look for in a tax preparer…..or what not to look for.

     On 10 January 2011 the IRS sent out an email (of course you had to be on the list). The IRS suggested 8 things that people need to be aware of when choosing a tax preparer. I thought it was a good idea. The laws have changed. I know when I started with my franchise my wife and I had to send in finger prints and register with the IRS. We also had to file for a tax preparer filing number (PTIN).

Every year we have to re-file for our PTIN. This is done to prevent fraud. People were getting into trouble letting others who were not certified file their taxes and it got them (the tax payer) into trouble. Why? Because it does not matter if you prepared your taxes or have someone else prepare them. Once you sign the return , you are stating that you have reviewed the document and you agree with it. Yes you read correctly. Once you sign your tax return it legally binds you to what is on that tax return, even if you did not prepare it. So make sure you read over your tax paperwork before you sign them.

With that said the IRS listed things you should look for in a  tax preparer and I will add one more important one for business owners.

1)      Make sure they are affiliated with an organization and provides continuing education.

2)      Check the preparers history

3)      Find out their service fees (if they charge a percent based off of refund head in the other direction)>

4)      Make sure tax prepare is accessible ( you should be able to get a hold of them after April 15).

5)      Never sign a blank return

6)      Provide ALL records and receipts to prepare your taxes.

7)      Review the entire return before signing.

8)      Make sure the preparer signs the return and includes their PTIN #

Those are the IRS’s 8 things to look for in a tax preparer. The one I want to add that is very important for small business owners is……

 Make sure the tax prepare owns at least one other business besides preparing taxes.

Why? It has been my experience that unless the tax preparer is a large corporate accounting firm, they will be conservative. Think about it. The worst thing that could happen to a tax preparation firm is to have a client get audited. That could kill a lot of their business. The more conservative the tax preparer the better it is for them. For you?  A lot of tax advantages left on the table not to be claimed. If they own another business they can at least let you know how things worked out for them being aggressive. Just a thought.