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Choose a Tax-Advisor

Updated: Sep 3, 2019

Preparing a Tax-Return is not preparing a nice dinner table for a family or friends. A Tax-Return may hurt you or your family in years to come.

There are some studies showed that a third of Taxpayers hire tax preparers or tax advisors to file their Tax Returns, but rarely any of the taxpayers know much about the Tax-Preparers or Tax-Advisors — or how to know them.

Approximately 80% of taxpayers who hired tax preparers never questioned about the preparer’s credentials, according to some surveys, and around 75% never asked if the preparer qualified to represent them in a tax audit.

That’s sounds so dummy, hiring a preparer means you are sharing your all financial and family information to the preparer.

Here is IRS says about the Tax Return Preparers: -

Types of Paid Preparers

Different types of preparers have differing skills, education and expertise. Another important difference is a preparer’s ability to represent taxpayers before the Internal Revenue Service.

There are two types of representation rights, also known as practice rights: unlimited and limited representation.

Preparers with unlimited representation rights can represent clients on any matters. That includes audits, payment issues, collection issues and appeals. Those with limited representation rights can only represent clients whose returns they prepared and signed. They can only represent a taxpayer when dealing with revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service.

Credentialed Return Preparers

Tax return preparers with unlimited representation rights include these professionals:

Attorneys. Attorneys are licensed by state courts, the District of Columbia or their designees, such as the state bar. They have a law degree and passed a bar exam. Attorneys generally have continuing education and professional character standards. Attorneys may offer a range of services. Some attorneys specialize in tax preparation and planning.Certified Public Accountants. CPAs are licensed by state boards of accountancy, the District of Columbia, and U.S. territories. CPAs must pass the Uniform CPA Examination. They completed a study in accounting at a college or university and met experience and good character requirements established by their board of accountancy. To maintain an active CPA license, CPAs must comply with ethical and continuing education requirements. CPAs may offer a range of services. Some CPAs specialize in tax preparation and planning.Enrolled Agents. The IRS licenses enrolled agents. They’re subject to a suitability check and have passed a three-part Special Enrollment Exam. The comprehensive exam covers federal tax planning, representation and tax preparation for individuals and businesses. They must complete 72 hours of continuing education every three years.


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