Hiring a Tax Professional

Enrolled agents (EAs) must pass a tax exam given by the IRS and are authorized to represent taxpayers before the IRS. They may be former IRS agents who are qualified as enrolled agents based on their past service and technical experience. Enrolled Agents have passed a three-part, comprehensive IRS exam covering individual and business returns. They must adhere to ethical standards and complete 72 hours of continuing education courses every three years. Enrolled Agents have unlimited practice rights before the IRS, which means they can represent taxpayers for any tax matter.

To help determine if a tax professional is right for you, you may consider asking the following questions. What is your fee schedule and what services does the fee cover ? What is your general background including your degree and business experience ? How much experience do you have with small businesses in my industry ? Do you hold an active PTIN license ? Are you available year round to answer questions ? What is your policy on mistakes made on clients tax returns ? Do you pay the penalties. Do you offer other services, such as tax planning, general financial planning, budgeting or retirement planning ? How active are you in the business community? Are you familiar with my type of customers ?

Fees are generally based upon the amount of time a CPA spends on your work. Hourly rates can vary from $75 to $300 per hour. However, most small to medium-sized firms provide services on a fixed-fee arrangement, which is discussed and agreed to by the client prior to inception of the work. Preparation of your tax returns is an example of a service provided that would be billed out at a fixed fee. Business services such as bookkeeping, payroll, sales tax and corporate tax return preparation services are often negotiated on a fixed annual retainer, which is billed monthly to the client. This arrangement allows the client to budget for the exact cost of such services in his monthly overhead.

You can verify that your tax accountant is licensed by visiting the website www.ptindirectory.com All tax preparers must now be registered with the IRS and obtain a preparer tax identification number. When you meet with your accountant, you can ask him or her to show you a copy of his PTIN . Many states also require licensing. CPAs, Enrolled Agents, RTRPs ) registered tax return preparers) and Lawyers can all be licensed to prepare tax returns and all must have a PTIN to practice.

No. Every new business should retain a licensed tax professional as soon as possible . A relationship with a trusted advisor such as a CPA , Enrolled Agent or RTRP is a lifelong relationship. A great tax profession is the source of unbiased advice and can provide guidance and peace of mind for the smallest of financial decisions. Not all CPAs or other professionals are willing to accept new business startups so find a tax professional in your community with whom you feel comfortable and who is excited about your new business.