According to the IRS (Internal Revenue Service), just over half of U.S. taxpayers use a tax preparer. There are several types of tax preparers, so if you work with one, some things to remember are:
- All tax preparers must have a current ID number that has been issued by the IRS
- If you are audited by the IRS, only certain types of preparers can represent you
- A high number of credentials often means you are more likely to pay more for services
Anyone can prepare your taxes. However, if you are paying to have this service done, it is best to go with a professional you know is certified and has completed the necessary education and certifications.
CPAs (Certified Public Accountants): Licensed by state boards after passing the Uniform CPA Examination; licensed by state boards of accountancy. CPAs also have continuing education and have met state requirements. There are even CPAs that specialize in tax preparation and planning.
Annual Filing Season Program Participants: These are volunteers, who are not CPAs, enrolled agents, or attorneys. These participants have completed a program, given by the IRS, for obtaining continuing education for that specific tax year.
Attorneys: These are professionals that have earned their law degree and passed the bar exam. These attorneys are licensed by the state or state bar association and are able to practice law, are subject to continuing education requirements, as well as a code of ethics.
Enrolled Agents (EAs): These are tax preparers that have passed a three-part Special Enrollment Examination to demonstrate competency in federal taxation and are licensed by the IRS. They are required to complete 72 hours of continuing education every three years to remain eligible.
PTIN Holders: Individuals with an active preparer tax identification number (PTIN), however, do not participate in the annual filing season program or have professional credentials. These preparers are not subject to any oversight by a state, a professional board, or the IRS. They also have no authority to represent clients before the IRS, with the exception of returns they prepared and filed before Dec. 31, 2015.
If you are a business, individual, or nonprofit in the Racine, Milwaukee, or Kenosha area and part of the half of the U.S. population that requires help with preparing your taxes, give our team at Perfect Balance Accounting Services a call. We look forward to helping you handle your diverse tax, accounting, and payroll needs!