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There is a staff shortage in the accounting industry and it is not too early to consider hiring an accountant for next season.
If you need someone with specialized knowledge, such as employee retention tax credits or cryptocurrency taxes, it may take longer to find a qualified partner. But checking is always important, experts say.
“Buyer beware,” said April Walker, senior manager of tax practice and ethics at the American Institute of CPAs. “Really, anyone can call themselves a tax advisor.”
The IRS recently unveiled a plan to specifically target “unscrupulous” tax preparers. However, there is currently a low barrier to entry into the profession, with the basic requirement being to register with the IRS for such a profession Preparer’s tax identification numberor PTIN.
In her Annual report 2022 Testifying before Congress, National Taxpayer Advocate Erin Collins highlighted the “lack of minimum competency standards for tax return preparers” as a key issue. If a preparer makes an error, the filer is ultimately responsible for the return and may face IRS enforcement action, she wrote.
Walker says the first step in finding the right tax professional is understanding your needs.
For example, the scope of the tax regime for W-2 employees is different than for a small business owner. There is also a big difference between preparing a tax return and ongoing planning throughout the year.
You can start the process by asking family, friends, or colleagues for recommendations and interviewing each candidate. “If they’re a good advisor, they want to be a good fit for you,” Walker said. “You want to build a lasting relationship, not just a transactional relationship.”
While anyone with a PTIN can legally prepare federal tax returns, preparers may have different levels of education, experience, and expertise.
There are three types of tax professionals unrestricted representation rights before the IRS: attorneys, accountants and registered representatives. This means they can represent you in all tax matters, including audits, payments or collections, and appeals, according to the IRS. Continuing education and ethics requirements also apply to these individuals.
However, unlicensed tax professionals can also provide good service, according to Josh Youngblood, a registered agent and owner of Youngblood Group, a Dallas-based tax firm.
“At the very least, they should participate in the IRS.” annual enrollment season program“This requires continued education and provides limited IRS representation rights, he said. “That at least shows some initiative compared to someone who just signed up online and got a PTIN.”