1. COMPETENCE AND CREDIBILITY
It is very important that you research the credentials of the person you have preparing your taxes. Look for credentials such as enrolled agent or CPA, which will give you some assurance that the preparer has had adequate education and meets ethical standards. Also, make sure that the tax preparer you choose can and will take the time to research any issues they may not be familiar with. They need to be able to call an expert, or have access to technical resources that can help answer any questions they may have.
In addition, use a reputable tax preparer that signs your tax return and provides you with a copy for your records. Also, consider whether the individual or firm will be around to answer questions about the preparation of your tax return, months, even years, after the return has been filed.
2. TECHNICAL EXPERTISE AND EXPERIENCE
While most tax preparers know a little about tax laws, many know almost nothing about technical issues. They need to have the technical knowledge to even know where to look, and the experience to know what to look for.
CPAs, accountants, and bookkeepers, without a tax specialty, may not have the time, experience, education, insight or technical skill to deal with the technical analysis and identification of issues necessary to effectively prevent avoidable tax overpayments.
It is important that the tax expert you choose not only has a number of years of experience tackling technical issues, but also a good technical knowledge base to draw from.
3. THOROUGH KNOWLEDGE OF THE LAW
In this industry, it is what you don't know that costs you money! There are literally volumes and volumes of laws that can potentially affect the amount of taxes you end up paying - and those laws change constantly. What most taxpayers don't realize is that even small changes can affect your taxes in a big way. Money Magazine's tax test has shown that unfortunately, very few tax preparers actually take the time to learn the hundreds of new tax laws released every year.
This is a total disservice to the taxpayer because the result is a representative who is unable to identify a tax issue, tax law, or fact that could support and justify a reduced tax liability. For this reason, the tax expert you choose should have thorough knowledge of current laws and stay continually educated on all new and updated tax laws and guidelines.
4. ATTENTION TO DETAILS
Most CPAs prepare tax returns for approximately three months out of the year and spend the balance of the time preparing books, records and financial statements. This makes it very difficult to keep up with the ever-changing tax law, especially on a part-time basis. Between February 1st and April 15th, the average tax preparer completes about 480 returns. With this overwhelming workload it is nearly impossible for an accountant to take the time during tax season, to thoroughly evaluate your tax situation and find all the latest tax laws and guidelines that can be applied, to help reduce your tax liability.
Find a tax expert that not only keeps up with current tax laws and changes, but also is not under the same time crunch and pressure. This way they can take the time to closely scrutinize your tax situation and aggressively look for every deduction that can be applied.
One of the best ways, however, to ensure that your tax preparer is doing the best possible job for you, is to get a qualified second opinion from a 'tax expert” who specializes in reviewing taxes and looking for areas where you may be overpaying.
“The March of Tax Changes in Recent Years Has Made It Easier to Err, and the New Tax Law Will Only Aggravate the Problem.”(US News and World Report)
Taxes may be one of the things you can be sure of in life, but the same can't be said of tax laws. They change constantly. The recent tax law changes include the most sweeping changes in 15 years. The new legislation makes 441 tax law changes spread through 189 sections of the Internal Revenue Code.
“In June 2001, for instance, President Bush signed into law the Economic Growth and Tax Relief Reconciliation Act of 2001. The Act significantly alters the tax treatment of several major financial issues, including income, retirement savings, educational savings and estate planning. It's a complex law that amounts to over $1 trillion in tax cuts, but most of those cuts are being phased in (and in some cases phased out) over a 10 year period, and the entire act itself will end in 2010. Between now and then, however, Congress may pass other measures that either extend provisions in the Act or eradicate them once the law sunsets.” (money.cnn.com/Personal Finance, Oct. 2002)
Now, It's More Important Than Ever To Get A Second Opinion On Your Taxes to Ensure You Are Not Cheating Yourself and Giving Uncle Sam a Windfall.
A second opinion will not only give you the peace of mind that your tax preparer is doing the best possible job they can for you, but more importantly will ensure that you are not paying one penny more than your fair share.
The IRS has $4.8 billion dollars of taxpayers' overpaid taxes, sitting in a trust fund in the U.S. Treasury – but it is not necessarily gone for good. Taxpayers can file amended returns up to three years later, and any money refunded is paid back with interest. (ABC News, April 12, 2002)

About The Author

Sean Schiraldi
Senior Account Executive
Taxback Recovery
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