When you choose a tax preparer, you want someone who not only knows how to reduce your taxes legitimately but who also follows ethical practices. This protects your business from legal and governmental problems.
Since you likely don't know the tax code intimately, though, how can you ensure that you chose an ethical preparer? Here are six ways to tell.
Good tax preparers are familiar with basic tax guidelines and tax law. In conversation, ask about specific parts of your returns and your industry. What tax deductions are available to you? Which ones are more particular to your type of business? What tax strategies do they recommend? What effect does recent reforms have on your return?
Asking questions and getting satisfactory answers will help you know you have an experienced preparer.
Each tax situation is different, and how to handle them depends on your situation. A quality tax preparer will endeavor to understand your business, your financial life, and your needs before preparing any returns. They will want to know about any life changes, any financial or family goals you have, and questions that you've had during the year.
In addition to general questions, a tax preparer should ask questions about most of your tax information. They should want additional information about asset purchases, business transactions, dependents, and income sources.
Anyone who doesn't request clarification is likely not doing their due diligence to protect you against unethical returns.
The IRS offers several certifications for different levels of preparers. A certified public accountant (CPA), for instance, has been trained in many aspects of accounting and can generally prepare most tax returns. An enrolled agent (EA) must pass an IRS exam in three parts and follow up with annual continuing education requirements.
The IRS also offers the Registered Tax Return Preparer (RTRP) program annually, which offers enrollment to those who have passed an annual exam. In addition, some states also have their own certifications.
Choosing a tax preparer who is certified by an authority means they have to adhere to a code of ethics and receive ongoing training. This helps you have confidence in their skills and their ethics.
A good tax preparer, like any good accountant, will help you avoid any reckless or illegal behavior. They will not suggest any choices that are dubious, at best, when it comes to IRS rules. And they will warn you off of any less-than-ethical tactics that you may have heard about from others.
Ask about the ethics of tax maneuvers, and if you're less than satisfied, you may not have the right preparer.
Does your tax preparer work with both your team and their own team? Isolation is a key indicator of someone who may not act in your best, most legal, interests. Look for someone who shares the workload with a valued team. That team should be empowered to make decisions, complete forms, and do their own research.
The tax preparer should also be able to work well with your own in-house team. That includes your bookkeeper, data clerks, managers, and accountant.
Open communication and teamwork between all these individuals will help prevent anyone from taking advantage of your business.
You should understand how your finances are being handled and how your tax returns are prepared. A good tax associate can make complex tax maneuvers and choices clear in a way that the client understands it. You are, after all, signing the tax return either as a business or an individual. You are ultimately responsible for the way things are presented, and so you should understand those aspects.
The experienced tax preparation team at
Quality Bookkeeping Services Inc.
is here to help with all your tax needs. We can help you lower your tax bill while adhering to the highest ethical standards. Call today for an appointment.
