Caveat emptor!
You are legally responsible for your tax returns even if someone else prepared the returns for you.
Who qualifies as an income tax preparer?
According to IRS, a tax preparer is any person who receives compensation for preparation of another individual's tax return.
However, there are NO educational & professional requirements from IRS for income tax preparers.
Types of income tax preparer
1) Local tax services
2) National tax services, such as H.R. Block or Jackson Hewitt
3) Enrolled agents (EA)
4) Certified public accountants (CPA)
5) Tax attorneys
Please note that only CPA and tax attorney have educational and professional requirements.
Choosing an income tax preparer
You should decide what level of services you need and how much you can afford to pay.
Do you want to save time, money, or both? Are you looking for someone to only prepare your tax return? Or, do you need someone to be your tax advisor year-around?
1) Does the preparer has training & experience in your tax situation? Does the preparer keep abreast of tax laws & changes in your area?
2) Can the preparer be reached during the year? Can the preparer represent you in an audit? Please note that only EA, CPA, or tax attorneys are authorized to represent you to IRS.
3) How is the fee determined? Ask for an estimated. Ensure that you have a clear understanding of the cost and what it includes. The fees could be based on the complexity of the return, but never on the size of the tax saving or refund.
Please go to this IRS web page for more information.
Free tax return preparation
The IRS has programs offer free tax help if you qualify.
1) Volunteer Income Tax Assistance (VITA) Program offers free tax help to low- to moderate-income (generally, $39,000 or less) people.
2) Tax Counseling for the Elderly (TCE) Program offers free tax help to people age 60 and older.
However, most volunteers often are just fill-in the lines on the tax forms; they may not able to offer any tax planning or advice.
7 May 2007 - Created
9 Aug 2008 - Updated
Saturday, August 9, 2008
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