Your Choice: CPA or Chain Store Preparer

How Do You Know If You Have a Qualified Tax Professional?

There are differences in skill levels between tax professionals and tax preparers. Understanding the differences can be critical to the success of your business or personal life. Individuals making important decisions of any kind experience the benefits of working with an experienced, licensed professional.

ASK THESE IMPORTANT QUESTIONS

EXPERIENCED, LICENSED PROFESSIONAL

UNLICENSED TAX PREPARER

 

IS THERE A REQUIREMENT TO ATTEND CONTINUING PROFESSIONAL EDUCATION (CPE CREDIT)?

YES

As a member of the AICPA and Illinois CPA Society, the licensed professional must complete 120 credit hours of continuing education every three years. This ensures current and working knowledge of tax code, and it enhances understanding and interpretation of the tax code to maximize clients' tax benefits.

NO

Though laws are changing, any person can be hired and trained in simple out-of-the-box tax form data entry without obtaining any tax credentials.

 

IS A SIGNIFICANT AMOUNT OF ATTENTION AND TIME GIVEN TO MY TAX ISSUES?

YES

It is our goal that all clients be given the adequate time and attention necessary to take full advantage of the tax code. We thoroughly interview clients to ensure that we have not missed any tax deductions. After all, you hire a tax professional to help identify tax deductions of which you, the taxpayer, are not aware.

NO

Chain preparers are encouraged to complete tax returns in as short a period as possible, following simple formulas. Their misses can cost you money in additional taxes, penalties
and interest.

 

ARE YOU REGISTERED WITH THE STATE?

YES

CPAs are licensed by or registered with the state and must comply with state and federal regulations. The licensed tax professional must attend continuing professional education classes to maintain his or her license with the state professional regulations board.

POSSIBLY
Most tax preparers are not licensed by or registered with the state, nor are they required to undergo any type of professional testing.
 

IS THERE DISCIPLINARY ACTION FOR INCOMPETENCE?

YES

CPAs are subject to disciplinary action. This means that the tax professional has much at stake to ensure that he or she has acted in the clients′ best interest.

NO

Unlicensed tax preparers have limited legal responsibility to be professionally competent. They are subject to disciplinary action by the IRS or the state only if they are deemed reckless or grossly negligent.

 

CAN I BE REPRESENTED IN AN AUDIT?

YES

The only professionals allowed to represent clients before the IRS are attorneys, CPAs, and enrolled agents. A CPA's assured knowledge of the tax code can be an extremely helpful resource in the event of an audit, and can help you avoid an audit in the first place.

NO

IRS code prohibits unlicensed preparers from representing their clients in an IRS audit.

 

IS HELP AVAILABLE TO ME ALL YEAR?

YES

A tax professional works throughout the year with clients, developing strategies to minimize their tax burden and providing assistance and guidance.

NO

Many tax preparers are seasonal workers. They set up shop only during tax season. If you receive a discrepancy letter from the taxing authorities during the year, you could be left high and dry.

 

ARE FEES BASED ON A PERCENTAGE OF THE REFUND?

NO

Per state law, a tax professional cannot base tax return fees on a percentage basis of a refund. This eliminates conflict of interest on many levels.

POSSIBLY

When this is the tax preparer's policy, the tax preparer has an incentive to ensure that the tax return results in a refund, rightly or wrongly. The taxpayer is responsible for paying back to the IRS any erroneously computed refund plus penalties and interest.

 

CAN YOU GO BEYOND THE 1040?

YES

If you must report income from a K-1 or on form Schedule C on your individual tax return, it is time to engage a tax professional who will take the time to uncover the information necessary to ensure that all deductions have been taken. To be handled correctly, these types of tax issues should have year-round proactive attention so that critical tax-saving opportunities are not missed.

POSSIBLY

Most tax preparers are unwilling to commit themselves to these engagements because their rate per hour will significantly decrease. They prefer to quickly run through these forms to get you and the tax return out their door.

 

DO I GET WHAT I PAY FOR?

YES, AND MUCH MORE

Simple tax returns prepared by a CPA are often priced lower than a chain tax preparer because a CPA′s source of revenue is not based solely on tax return preparation. Fees are comparable, so you can have the peace of mind of engaging a licensed educated tax professional to prepare your tax return, while receiving the embedded benefits of a CPA.

YES AND NO

An unlicensed preparer's fees can be higher than those of a licensed professional. You are paying for marketing campaigns, temporary office furnishings and corporate profit motivations. You wouldn't trust your health to a person who doesn't have a medical degree, or hire a lawyer who didn't pass the bar exam. It follows that it wouldn't be wise to trust your financial well-being to an unlicensed tax preparer who is responsible only for placing numbers on your tax return that you provided and who has no legal responsibility.

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