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4 Critical Things You Should Demand From A Tax Professional
1. COMPETENCE AND CREDIBILITY
It is very important that you research the credentials ofthe person you have preparing your taxes. Look forcredentials such as enrolled agent or CPA, which will giveyou some assurance that the preparer has had adequateeducation and meets ethical standards. Also, make sure thatthe tax preparer you choose can and will take the time toresearch any issues they may not be familiar with. Theyneed to be able to call an expert, or have access totechnical resources that can help answer any questions theymay have.
In addition, use a reputable tax preparer that signs yourtax return and provides you with a copy for your records.Also, consider whether the individual or firm will bearound to answer questions about the preparation of yourtax return, months, even years, after the return has beenfiled.
2. TECHNICAL EXPERTISE AND EXPERIENCE
While most tax preparers know a little about tax laws, manyknow almost nothing about technical issues. They need tohave the technical knowledge to even know where to look,and the experience to know what to look for.
CPAs, accountants, and bookkeepers, without a taxspecialty, may not have the time, experience, education,insight or technical skill to deal with the technicalanalysis and identification of issues necessary toeffectively prevent avoidable tax overpayments.
It is important that the tax expert you choose not only hasa 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 youmoney! There are literally volumes and volumes of laws thatcan potentially affect the amount of taxes you end uppaying - and those laws change constantly. What mosttaxpayers don�t realize is that even small changes canaffect your taxes in a big way. Money Magazine�s tax testhas shown that unfortunately, very few tax preparersactually take the time to learn the hundreds of new taxlaws released every year.
This is a total disservice to the taxpayer because theresult is a representative who is unable to identify a taxissue, tax law, or fact that could support and justify areduced tax liability. For this reason, the tax expert youchoose should have thorough knowledge of current laws andstay continually educated on all new and updated tax lawsand guidelines.
4. ATTENTION TO DETAILS
Most CPAs prepare tax returns for approximately threemonths out of the year and spend the balance of the timepreparing books, records and financial statements. Thismakes it very difficult to keep up with the ever-changingtax law, especially on a part-time basis. Between February1st and April 15th, the average tax preparer completesabout 480 returns. With this overwhelming workload it isnearly impossible for an accountant to take the time duringtax season, to thoroughly evaluate your tax situation andfind all the latest tax laws and guidelines that can beapplied, to help reduce your tax liability.
Find a tax expert that not only keeps up with current taxlaws and changes, but also is not under the same timecrunch and pressure. This way they can take the time toclosely scrutinize your tax situation and aggressively lookfor every deduction that can be applied.
One of the best ways, however, to ensure that your taxpreparer is doing the best possible job for you, is to geta qualified second opinion from a �tax expert� whospecializes in reviewing taxes and looking for areas whereyou may be overpaying.
�The March of Tax Changes in Recent Years Has Made ItEasier to Err, and the New Tax Law Will Only Aggravate theProblem.�(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 changeconstantly. The recent tax law changes include the mostsweeping changes in 15 years. The new legislation makes 441tax law changes spread through 189 sections of the InternalRevenue Code.
�In June 2001, for instance, President Bush signed into lawthe Economic Growth and Tax Relief Reconciliation Act of2001. The Act significantly alters the tax treatment ofseveral major financial issues, including income,retirement savings, educational savings and estateplanning. It�s a complex law that amounts to over $1trillion in tax cuts, but most of those cuts are beingphased in (and in some cases phased out) over a 10 yearperiod, and the entire act itself will end in 2010. Betweennow and then, however, Congress may pass other measuresthat either extend provisions in the Act or eradicate themonce the law sunsets.� (money.cnn.com/Personal Finance,Oct. 2002)
Now, It�s More Important Than Ever To Get A Second OpinionOn Your Taxes to Ensure You Are Not Cheating Yourself andGiving Uncle Sam a Windfall.
A second opinion will not only give you the peace of mindthat your tax preparer is doing the best possible job theycan for you, but more importantly will ensure that you arenot paying one penny more than your fair share.
The IRS has $4.8 billion dollars of taxpayers� overpaidtaxes, sitting in a trust fund in the U.S. Treasury � butit is not necessarily gone for good. Taxpayers can fileamended returns up to three years later, and any moneyrefunded is paid back with interest. (ABC News, April 12,2002)
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