Who is the best person to help you prepare your tax return?
Although business tax returns can be prepared by a number of different types of skilled accounting professionals, some are better than others.
A good tax preparer fulfills several roles:
- Tax advisor. The preparer can also serve as a tax advisor, helping you make tax planning decisions.
- Preparer Of course, the preparer can also prepare the tax return for you. This individual should sign the return, so it is clear who did the work.
- IRS Representation Your tax preparer should also be able to help if you get audited, by representing you before the IRS and Tax Court. Not all tax preparers can do this. Certainly, you can hire someone after the fact to represent you with the IRS if you get audited, but it's always better to have the person who completed the tax return be present at the audit to explain what was done and why.
What are the Types of Professional Tax Preparers?
You can have your business taxes prepared by an unenrolled preparer, but this person cannot sign your tax return or represent you before the IRS for an audit.
An accountant also may be able to prepare and sign tax returns, but the designation of "accountant" does not provide assurance of certification, nor does it give the accountant the ability to represent you before the IRS, even if this person has signed your tax return.
Accountants are classified by the IRS as "un-enrolled preparers."
An Enrolled Agent is also able to prepare tax returns. An enrolled agent is an individual who has been given the privilege of practicing before the Internal Revenue Service (IRS), which includes preparing and filing documents, communicating with the IRS, and representing taxpayers in matters involving the IRS, including tax audits. But an Enrolled Agent cannot represent you in Tax Court.
A Certified Public Accountant (CPA) is an accounting professional who has passed a qualifying exam and who is licensed to provide accounting and tax services to individuals and businesses. Most CPA's specialize, so find a CPA who does mostly taxes if you want a CPA to provide tax preparation and advisory services.
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