Tips for Finding the Right Tax Accountant for You

Referrals Are Always a Good Place to Start

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You don't necessarily have to be wealthy or own a business to benefit from hiring a tax accountant. It might just be that preparing your own taxes is too stressful or confusing, or you might be facing a problem such as filing back taxes, paying off a tax debt, or fighting an IRS audit. Finding the right professional doesn't have to be a challenge if you know how to go about it, but you'll want to make sure you choose the right one for your needs.

Where to Look for a Tax Accountant

Some accountants are jacks-of-all-trades, while others specialize in certain areas. You don't want to hire someone who has never handled an audit before if you're being audited, but by the same token, you probably don't need an audit expert to explore tax-advantaged savings for your new child's education.

Asking for referrals can be a good bet when it comes to finding someone who's the right fit for you and your needs. Ask business owners, financial advisors, and attorneys, but don't overlook family and friends, either. Pretty much everyone files taxes—or, at least, they're supposed to—so there's a wealth of names out there. Explain why you're looking for an accountant and what you want the accountant to do for you. This will help people to steer you in the right direction. 

Don't hesitate to call the firm or the accountant to explore whether they have the expertise to handle your taxes if there's anything unusual about your situation.

Beware of Red Flags

Be wary of an accountant who promises you a giant refund right from the start before even analyzing your personal financial situation. The same goes for someone who says that you can deduct an excessive number of expenses before really talking to you.

No one can legally accept payment for preparing your taxes unless they have a preparer tax identification number (PTIN) from the IRS. The number should be entered on any tax return they file for you. Something might be amiss if you don't see one.

You can pull the plug if necessary—you're not committed for life. Don't be afraid to shop around or to change accountants if you aren't satisfied or comfortable with the service you're receiving, even if you're midway through the process and the tax deadline is looming. You can always request an extension of time to file your return by submitting IRS Form 4868 instead.

Those Retail Franchises

Retail tax franchises such as H&R Block, Jackson Hewitt, and Liberty Tax Service offer competent help if you just want to file a relatively straightforward tax return. Sometimes you can even find certified public accountants (CPAs) and enrolled agents (EAs) working in these offices.

Ask if you can meet with a CPA, an EA, or a senior tax preparer if you decide to use one of these services. You'll usually pay the same price, but you'll get to work with a more seasoned professional.

Different Types of Tax Professionals: Enrolled Agents

EAs are the elite, at least as far as IRS credentials are concerned. They've passed rigorous testing and background checks administered by the IRS. The testing involves three parts.

Some EAs are approved without testing because they've actually worked for the IRS, but all have to complete continuing education requirements every three years.

EAs often specialize in certain tax areas, and they're best for dealing with complex tax situations. They can represent you before the IRS if you're faced with an audit or collection actions.

Certified Public Accountants

CPAs have passed the rigorous Uniform CPA Examination and they're licensed by the board of accountancy in the state where they work. They have accounting degrees from a university or college, and continued licensing requirements involve meeting certain character and experience thresholds.

CPAs often specialize in areas specific to accounting. Some specialize in tax accounting, but not all CPAs handle tax issues. A CPA can also represent you before the IRS if you're dealing with an audit or collections.

Tax Attorneys

Tax attorneys are lawyers who specialize in tax law, and they're licensed by state courts and state bar associations. They often have master of law degrees in taxation, in addition to required juris doctor degrees.

Attorneys are best at complex legal matters such as preparing estate tax returns or taking your case before the U.S. Tax Court. They're also subject to continuing education requirements. 

Yes, You Do Need to Interview

You don't want commit your personal business to anyone you haven't met, so arrange to sit down the professional first to discuss your situation and to ask some questions, even if you have to do it over the phone. Request references, just as you would from anyone you're thinking of hiring—and reach out to those references.

Keep in mind that not everyone will feel comfortable talking to you, and keep it simple: "Are you pleased with their services?" "Ever have a problem with them?" The answers to these questions can tell you a lot, especially if you shut up after asking and let the other individual state whatever comes to mind.

Questions to Ask 

Asking the right questions can help ensure that you find someone who's experienced and trustworthy. Some areas to explore include:

  • What licenses or designations do you have?
  • How long have you been in the tax business?
  • What tax issues do you specialize in?
  • Do you outsource any of your work or do you and/or your staff perform all work personally?
  • Approximately how long will it take you to finish my taxes?
  • What are your fees? Are they negotiable? Can I have that in writing?
  • What is your privacy policy?
  • Do you believe that I'm paying too much, too little, or just the right amount of tax?

The law requires that accountants provide written statements regarding their privacy policies to all clients. Ask for a copy if you're not offered one.

Some Final Precautions

Perform a quick background check after your interview. You might even search for the professional's name in social media. Find out what's said on their own site, and what others have said about them.

Contact your state's board of accountancy to check the status of a CPA's license or to find out if any disciplinary action has ever been taken against the accountant. You can ask the IRS Office of Professional Responsibility if an EA has ever been censured, disbarred, or subjected to other disciplinary action. You might also want to check with your local chamber of commerce.

Remember that you, not the accountant, are ultimately responsible for the information included on your tax return.

Article Sources

  1. IRS. "Understanding Tax Return Preparer Credentials and Qualifications." Accessed Jan. 27, 2020.

  2. IRS. "Enrolled Agent Information." Accessed Jan. 27, 2020.

  3. Association of International Certified Professional Accountants. "Privacy Policy." Accessed Jan. 27, 2020.

  4. IRS. "The Office of Professional Responsibility (OPR) At-a-Glance." Accessed Jan. 28, 2020.