I have no use for bodyguards, but I have very specific use for two highly trained certified public accountants. – Elvis Presley
Certified Public Accountants: CPAs have passed a four-part Uniform Certified Public Accountant Examination and met additional certification requirements for your state in order to work as a public accountant. Many times, CPAs get their start in all sorts of businesses, from hospitals to non-profits to small companies.
A good CPA has those fancy diplomas on his/her wall and likely some other certifications. It’s always fine for you to ask to see a resume or CV.
Enrolled Agents: EAs have unlimited rights to represent taxpayers before the IRS. Some may actually be former IRS agents, so they know how to legitimately play the game. Enrolled agents are federally licensed to advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements.
Licensed Taxation Attorneys: In addition to their JDs, attorneys often complete a one-year, full-time program to attain an LL.M. (Master of Laws). This is an internationally recognized postgraduate law degree. Ask if your attorney has an LL.M. in taxation. If the answer is “no,” then ask for a referral.
I fit the first and third of the above descriptions. It’s possible for your accountant to fit all three. There are continuing education courses that each can/should take to stay updated with tax laws and codes. You can ask to see proof of those completed courses as well.
You’ll notice I’ve omitted “tax preparer” from the above list. They work hard but do not have to meet the same requirements as the above three and cannot represent you during an audit.
The Case For People
We’ve discussed the value of in-person relationships and the human factor, and when it comes to your business’ finances and taxes, nothing will ever replace having someone or a group handle it for you. There are money-saving options and updated laws that professionals know of that you may not be privy to, or that software may not be updated with.
Regarding personal finances, if you’re aiming for a big refund, shell out a couple of hundred dollars up front to hire someone to help you find the thousand or more you seek. File electronically so that your refund is expedited.
The Case Brought On By The People
Doing things on your own can have its consequences. The New York State Attorney General’s office and the Tax Commissioner recently made an example of someone who filed on his own for years. Due to forgery and fraudulent refund claims, he now owes $25,000 and faces a slew of felony charges. Ultimately, he defrauded his fellow taxpayers with his dishonesty.
It’s the duty of a licensed accountant or preparer to prevent that. On several occasions, I’ve had to pick up the pieces after an unlicensed preparer makes a mess of someone else’s finances — or his/her own. It’s great for my business, but I unfortunately cannot write off the boxes of Aleve that come with it.
Always feel free to contact Brinen & Associates with tax questions and comments.