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Selecting a Tax Advisor

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How to Select a Tax Advisor 

Tax advisors come with many different types of credentials and some do not have credentials. Tax advisors can be certified public accountants, attorneys, enrolled agents, public accountants or accountants. All states require credentials for certified public accountants, attorneys and enrolled agents. A few states require credentials for other types of tax advisors.

Step No. 1

Consider one of the types of tax advisors that are required to have credentials. That does not mean that all credentialed advisors are better than non-credentialed, only that when you start your initial search your likelihood for success is greater with the credentialed tax advisor. Credentials refer to licenses that are issued by the governing state. Those licenses by no means represent competency, only control by the state. Such licenses require a certain amount of continuing education.

Step No. 2

Now you have decided what professional you are going to interview as a potential tax advisor.

For this exercise, let’s assume you select a certified public accountant (CPA). A CPA is generally looked upon as the best selection for a tax advisor.

Several questions must be asked of yourself:

What CPA do I interview? The majority of new clients a CPA receives are word of mouth referrals. It is useful to ask friends, fellow officials, co-workers and others to refer you to a CPA.

What am I going to use the CPA for? Tax preparation? Tax planning? Estate planning? Most CPAs have extensive tax knowledge; however, areas beyond tax are specialty areas and you must be sure the individual you are going to interview specializes in the areas you need.

Once you have decided whom you will interview you must be prepared to ask the CPA, at a minimum, the following questions:

  • What is the tax practitioner’s educational background and experience? Is the advisor affiliated with any tax-related industry or professional association?
  • Will the interviewer also be the person who prepares the return? If an associate fills out the forms, ask about that person's credentials, too.
  • Can the preparer be reached year-round or at tax time only? Remember that you may need tax advice or help with questions from the IRS at any time of the year.
  • What is the preparer's specialty and will it fit your tax needs? How many tax returns does the advisor prepare each year and what types are they?
  • How is the accuracy of the preparer's work checked? Will one or more people review it? Will they check for mathematical errors as well as mistakes in tax rule interpretation?
  • Will the preparer accompany you to the IRS in case of an audit? Is the advisor legally approved to represent you before the IRS? Is there an additional charge?
  • How is the fee determined? Ask for an estimate of the total bill and be sure you understand what services are included beyond the preparation of your return, and which are excluded
  • Will the preparer provide references? Ask for and check references from two or three clients with tax situations similar to yours. Contact the Better Business Bureau for a reliability report on practitioners that you consider.

After you get all of the above information you must consider the person’s business style and attitude. Does it match yours? Is he or she formal or informal, conservative or aggressive? When you have all of that information compiled you must then decide if it is the right fit for you. You can interview several CPAs. The bottom line is that you must have a good feeling that it is right. If not, move on.


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