Preparing for Tax Season: How to Choose the Right Tax Preparer

The holidays are behind us, and you know what that means—tax season is here. Have you decided who will prepare your taxes? If not, you may want to act quickly. A shortage of qualified tax preparers could make finding a reputable professional more challenging this year.

Understanding Your Tax Preparer Options

When hiring a professional to prepare your taxes, you'll typically encounter one of the following:

• Certified Public Accountants (CPAs): CPAs have extensive training and must meet stringent educational and licensing requirements. They can offer a broad range of financial services beyond tax preparation.
• Enrolled Agents (EAs): These professionals specialize in tax matters and must pass a comprehensive IRS exam. While their requirements are less demanding than CPAs, they are still highly qualified to handle tax filings.
• Tax Attorneys: Some attorneys specialize in tax law and can provide legal representation for complex tax matters.

Unfortunately, there is currently a shortage of CPAs and Enrolled Agents. Fewer young professionals are entering the field, and some firms are even offering high school interns $22 an hour to attract them to the profession.

The shortage of tax professionals could push many taxpayers to seek help from unqualified or fraudulent preparers. Scam artists often exploit the demand, falsifying credentials to perpetrate refund fraud, identity theft, and other schemes.

To avoid falling victim to these scams, knowing what to look for in a qualified tax preparer is essential.

How to Choose a Qualified Tax Preparer

The IRS provides several recommendations to help taxpayers identify and hire reputable preparers. Here are some key steps you should take:

1. Verify Availability and Credentials Look for a preparer who is available year-round. If you face an audit, you’ll want someone who can support you beyond tax season. Be wary of “fly-by-night” operations that disappear after April. When interviewing a preparer, ask for their IRS Preparer Tax Identification Number (PTIN)—all paid tax preparers are required to have one and must enter it on any tax returns they prepare.

You can verify a preparer’s credentials in the IRS Directory of Federal Tax Return Preparers, which allows you to search by location and qualifications.

2. Check Professional Background

Ask if the preparer holds professional credentials such as CPA or Enrolled Agent and inquire about their continuing education. Tax laws change frequently, and ongoing education is crucial to staying up-to-date.

To further verify credentials:

• For CPAs: Contact your state’s Board of Accountancy.
• For Enrolled Agents: Use the IRS verification tool to check their status.
• For Tax Attorneys: Check with your state’s Bar Association.

3. Ask About Fees and Refund Policies

Avoid tax preparers who base their fees on a percentage of your refund or who claim they can get you a larger refund than their competitors. These can be red flags for unethical or fraudulent practices.

Never provide personal documents or Social Security numbers to a preparer until you’ve thoroughly vetted their background and legitimacy.

4. Ensure IRS E-File Compliance Make sure your preparer offers IRS e-file, as it’s the safest and most accurate way to file. Preparers handling more than 10 clients are required by law to file electronically. If a preparer refuses to e-file, consider it a red flag. 5. Provide Proper Documentation

Legitimate tax preparers will always ask for records and receipts to support your income and deductions. Be wary of any preparer who suggests they can file your return based on a pay stub alone. Proper documentation, such as a W-2 or 1099 form, is required for accurate filing.

6. Know Your Rights for Representation

If you are audited, remember that only CPAs, Enrolled Agents, and tax attorneys have unlimited representation rights before the IRS. Non-credentialed preparers, including well-meaning friends or family members, cannot represent you in legal tax matters.

7. Review Your Return Carefully

Never sign a blank or incomplete tax return. Always review the completed return for accuracy and ask questions if anything seems unclear. Be sure that any tax refund is deposited directly into your own bank account, not your preparer’s.

Consider a Certified Kingdom Advisor One way to ensure you’re working with a reputable professional is to seek a CPA, Enrolled Agent, or tax attorney with the Certified Kingdom Advisor (CKA) designation. CKAs are trained to provide financial guidance with biblical wisdom, ensuring integrity and stewardship in their practice.

Choosing the right tax preparer is crucial to ensuring your taxes are filed accurately and securely. By following these guidelines and verifying credentials, you can protect yourself from scams and find a professional who will serve you well throughout tax season and beyond.