WASHINGTON–(BUSINESS WIRE)–Be a wise consumer when choosing your tax preparer, Edward
Karl, CPA, CGMA, vice president of taxation for the American
Institute of CPAs (AICPA), advises taxpayers. “It’s important to
thoroughly vet the person you select to prepare your taxes,” he said.
“Your tax preparer will be handling critical financial and personal
information for you. Be wary about who you hire.”
Here are 10 tips Karl recommends for selecting a CPA (certified public
accountant) or other tax preparer:
Get referrals. Ask relatives, friends, neighbors, co-workers or
others you trust in your community for referrals. Referrals are one of
the best ways to locate a CPA.
Verify credentials. Many CPAs specialize in taxes, but not all
tax preparers are CPAs. Stringent state licensing rules – including
education, examination and experience requirements – distinguish CPAs
from other tax preparers. CPAs also must satisfy extensive continuing
education requirements and comply with a broad code of conduct and tax
ethical standards. Confirm that the CPA is currently licensed. Most
state boards of accountancy have websites that allow consumers to check
the status of an individual’s license.
Check for consumer complaints. Have complaints been filed against
the tax preparer? Have they been resolved to the consumer’s
satisfaction? Have any lawsuits been filed?
Interview potential tax preparers. Meet with the tax preparer.
What’s their area of expertise? Find out whether the preparer has other
clients with your type of tax situation, how long they’ve been in
business and whether they will be there year round to serve not only
your tax filing requirements, but also to help with future tax, college,
retirement and business planning needs.
Ask how they bill. They may not be able to tell you exactly how
much it will cost to prepare your tax return, but they should be willing
to explain the basis of their fee structure. Is it hourly or a flat
rate? Can they provide you with an estimate?
Question them about how they work. Will the tax practitioner
prepare your return or will others prepare it? If others prepare it,
will the practitioner review it and sign it? Do they use only internal
staff or do they outsource work? Will they be available to respond to
questions about the return from IRS or state officials?
Inquire about information security processes. How do they protect
their clients’ personal and financial information? How many people will
see your information? Is data encrypted? How do they protect against
computer network breaches?
Do your styles match? Ask about weekend or evening hours, how
soon telephone calls are returned, how they use technology and what the
timetable is for completing the return.
Confirm they have an IRS PTIN. All paid tax return preparers are
required by law to have an IRS Preparer Tax Identification Number (PTIN)
and to include it and their signature on the returns they prepare for
clients. The PTIN number is renewed each year. Confirm that they have a
PTIN using the tool
on the IRS website.
Red flags. If the preparer says they will prepare an original tax
return (not an amended return) for a percentage of the refund, commonly
referred to as a contingent fee, walk away. Also walk away if the tax
preparer won’t provide information about the fee or how they charge.
Don’t hire a preparer who promises something good without seeing your
prior year’s return, who suggests taking a deduction or credit that
makes you uncomfortable, who asks you to sign an incomplete or blank
return or who wants your refund to be deposited into their bank account
instead of yours.
About the AICPA
The American Institute of CPAs (AICPA) is the world’s largest member
association representing the accounting profession, with more than
412,000 members in 144 countries, and a history of serving the public
interest since 1887. AICPA members represent many areas of practice,
including business and industry, public practice, government, education
The AICPA sets ethical standards for the profession and U.S. auditing
standards for private companies, nonprofit organizations, federal, state
and local governments. It develops and grades the Uniform CPA
Examination, and offers specialty credentials for CPAs who concentrate
on personal financial planning; forensic accounting; business valuation;
and information management and technology assurance. Through a joint
venture with the Chartered Institute of Management Accountants (CIMA),
it has established the Chartered Global Management Accountant (CGMA)
designation which sets a new standard for global recognition of
The AICPA maintains offices in New York, Washington, DC, Durham, NC, and
Media representatives are invited to visit the AICPA Press Center at aicpa.org/press.
American Institute of CPAs (AICPA)
Shirley Twillman, 202-434-9220