Be Cautious When Choosing a Tax Preparer

When hiring a tax return preparer, make sure that they have all the proper qualifications and are registered with the IRS to prepare a tax identification number. Ann Carrns advises you to ask plenty of questions about the credentials of your preparer in her article, which begins as follows:

Consumers looking for someone to handle their income tax returns may not know that many paid tax preparers aren’t required to have special training or pass a test to prove their expertise. So it’s important to do some research before handing over your financial information.

Certain types of tax preparers — certified public accountants, tax lawyers and tax specialists called “enrolled agents” — generally must meet minimum standards for education and training to maintain their licenses. (C.P.A.s and lawyers are licensed by states, while enrolled agents — some of whom are former Internal Revenue Service employees — are federally licensed.)

But a large number of independent paid preparers are largely unregulated and don’t have to prove they have any special tax expertise. Just a handful of states (California, Maryland, New York and Oregon) require paid preparers to meet any minimum education or competency standards.

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