Professional Tax Preparer Options

Lesson

In this lesson, you’ll learn about the types of professional tax preparers who can help you file your tax return. There will be a short quiz at the end of this lesson to make sure you understand the material before moving onto the next lesson.

If you’re not tech savvy, or just don’t want to take the time, a professional tax preparer can complete and file your tax return using the records you provide them. There are four types of professional tax preparer.

Noncredentialled Tax Preparer

A noncredentialled tax preparer may prepare taxes without any credentials from any organization. This doesn’t mean, though, that noncredentialled tax preparers are not qualified to prepare your tax return. Seasonal tax preparers who volunteer for the IRS’s tax assistance program, or tax preparers working for name brand tax preparation companies are usually noncredentialled tax preparers.

Tax preparation companies often require seasonal tax preparers to take training courses before preparing anybody’s taxes. Self-employed seasonal tax preparers may also have taken a free, voluntary, 18-hour training course offered by the IRS. Graduates receive a certificate of completion to prove that they are qualified.

Some states require noncredentialled tax preparers to complete training courses before registering as a preparer, but most states do not. Check with your tax preparer to find out whether they’ve had any formal training to prepare tax returns.

Noncredentialled tax preparers are appropriate for most simple tax situations, but may not be able to handle more complex situations.

Enrolled Agent

Enrolled agents are licensed by the IRS to represent any person or business on any federal tax matter. To become an enrolled agent, they must pass a licensing test to prove that they understand preparing tax returns, representing clients, and other aspects of being a tax professional.

You may want to hire an enrolled agent if you have a more complex tax situation but don’t need any other accounting services.

Certified Public Accountant

A certified Public Accountant, or CPA, is a professional licensed by your state to provide professional accounting services. Like an enrolled agent, a CPA can represent any person or business on any federal tax matter. Some CPAs specialize in tax preparation, but some provide other services including:

  • Maintaining financial records
  • Examining financial statements
  • Providing auditing services

CPAs must pass the Uniform Certified Public Accountant Examination. Most states also require that CPAs pass an ethics exam.

You may want to hire a CPA if you have a more complex tax situation and also need other services such as maintaining financial records for your business. CPAs who also maintain your financial records may be able to get started on your tax return with less help from you during tax season.

It’s important to know that not all CPAs are tax experts. Check with your CPA to insure that they specialize in taxes before hiring them to complete and file your tax return.

Tax Attorney

A tax attorney is a professional licensed by your state to practice law. Like enrolled agents and Certified Public Accountants, tax attorneys can represent any person or business on any federal tax matter.

Tax attorneys must have a law degree and pass a state Bar exam. They usually also need to meet some character requirements defined by the state Bar Association.

Tax attorneys provide a number of services including:

  • Tax return preparation
  • Tax planning
  • Providing advice on long-term strategies to reduce taxes

You may want to hire a tax attorney if you have a complex tax situation and need other services a tax attorney is able to provide.

Quiz