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26 January, 2022

10 Tell-Tale Signs You Need to Get a New Tax Preparer

More than half of all U.S. taxpayers, or many tens of millions of people, will use a tax preparer during tax season. Even if you have retained the services of a professional tax preparer, it doesn’t necessarily mean your taxes will be done right. Just like selecting a doctor or a plumber, you need to make sure your choice of a tax preparer is the right one for your personal, professional, and financial needs.

Just because tax preparers are credentialed and have licenses, doesn’t mean they are all equally competent and equipped to do the job of preparing your taxes correctly and in a timely fashion. Like other professionals, some tax preparers are better than others. It is important to find a tax preparer who you like and trust.

When it comes to being confident you have chosen the right tax preparer, there are certain signs to observe that will indicate whether he or she is truly competent and able to do the job. 

Signs You Need to Find Another Tax Preparer 

1)     Your Tax Preparer Charges More Than Seems Appropriate & Doesn’t Explain Why

The cost of a tax preparer varies for a number of different reasons. There are services which send people to training for a couple of weeks and then they start preparing taxes. There are licensed tax preparers and then there are CPA’s. CPAs tend to be higher cost than someone who spent 3 weeks training but, if you need someone in your corner when the IRS comes calling they are the best equipped to help. However, there are CPAs who charge exorbitant prices. It is important to be clear on what you are expected to pay. If they don’t give you up front pricing, beware. There are firms who charge by the hour and they will log as many hours on your dime as possible. Know what costs you expect to incur before you commit and you’ll be glad when the bill comes.. 

 2)     Your Tax Preparer Will Not Answer Basic Tax Questions

There is no doubting the fact that the Tax Code is highly complex and a difficult subject to understand, let alone explain. However, your tax preparer, as opposed to a lay person, is equipped with a lot of experience and education to be able to decipher and explain complex tax matters. They should be expected to understand the nuances of tax law.

Your tax professional should also be able to answer simple or basic questions regarding your tax forms. They also ought to be prepared to explain what your options are when it comes to payment and planning. If you can’t obtain satisfactory answers to your basic questions, take your taxes elsewhere. 

3)     Your Tax Preparer Refuses to Respond to Phone Calls or Emails

When you think about how many questions are naturally going to come up with something as important and as intricate as a tax return, it makes sense that you should have access to your tax preparer. You have a right to expect your tax preparer will respond to your inquiries within a fair and reasonable amount of time, and this would typically be a day or two excluding weekends. They should make themselves available at reasonable times to answer your questions.  Afterall, this is your money they are working with as they determine how much you might have to pay the Internal Revenue Service. Some tax professionals put a certain number of consultation hours in the contract. You might want to clarify the number of consultation hours included in your contract. The tax season can be a drag without an accountant on your side. The best preparers will communicate proactively and remind you of what’s required to get those taxes filed! Make sure you read over all documents so there aren’t any surprises when it comes time for payment! 

If you find your tax preparer to be unresponsive, then begin looking for another tax preparer. 

4)     Tax Preparer Makes Blanket Claims without Knowing Your Financial Situation

If your tax preparer tells you, for example, that you are due for a big tax refund or you have a substantial tax liability, but they aren’t acquainted with your financial situation yet, that behavior is a giant  red flag.  Similarly, you should be cautious if your tax professional tells you what they will charge for their services before thoroughly reviewing all of the financial records. Blanket charges are a sign something is not right.   It is a good indication they have a one size fits all approach often missing potential credits and deductions.

When it comes to factors influencing your tax preparation costs, they include your marital status, whether you own a business, if you have children, your education costs, etc. Another major element to consider is if you are employed in multiple states, which necessitates multiple state filings. The variables go on and on.  

5)     Your Tax Preparer Does Not Sign Your Return

You should absolutely start searching for another tax professional if the one you have won’t sign your tax return. By law, your tax preparer is required to sign your tax return. Note,  an electronic signature is acceptable in most cases, as well. You should never trust a tax preparer who declines to sign your return or requests you to sign it as self-prepared. That recommendation is a major red flag. 

6)     Your Tax Preparer Tells You to Sign Your Return & Doesn’t Review It With You

You should never sign your tax return before you have had an opportunity to review it first. It coincides with the saying don’t sign any important document without first reading it. This is certainly the case with your tax return. A high quality tax preparer will review it with you to make sure your questions are answered, your information is accurate, and you approve your tax return prior to submission. 

Consider that you are signing this tax document under penalty of perjury. You must always know what you are signing before you sign it. 

7)     Your Tax Professional Doesn’t Protect Your Tax & Financial Information

It is nothing short of a lack of professionalism for your tax preparer to not take measures to protect your important tax documentation and financial information. 

A quality tax preparer will have security protocols to protect your data. Ideally, it is best to discuss safety protocols before hiring a tax professional but, today is better than never.  If you have doubts about the safe keeping of your documents, then ask your tax preparer about it. 

8)     Your Tax Professional Declines to Cooperate with the IRS

It is not acceptable for your tax preparer to not cooperate with the IRS.  For example, it should raise concerns if your tax preparer is not responding to inquiries from the IRS. Keep in mind that if the IRS has lingering issues with your tax return, it is you who could pay the penalty, and not your tax preparer. 

Look out for your best interest by requesting copies of  your tax professional correspondence between your tax preparer and the IRS sent on your behalf, especially if you have a compliance matter, open collections, or other time-sensitive issues that need to be resolved. You should also ask your tax professional for frequent updates if you do not already receive them.

When dealing with the IRS your choice of tax professional will pay dividends. A CPA has more ability to work with the IRS than non-licensed tax preparers. In many cases a CPA can take care of communication directly. Non-licensed tax professionals cannot represent clients regarding appeals or collection issues even if they did prepare the return in question. 

9)     Your Tax Preparer is Not Knowledgeable About Tax Law Changes

There are many aspects of tax law that change, or are updated on a regular basis, sometimes every year. A competent tax professional should be keeping abreast of the latest adjustments made to the Tax Code and changes made to the tax laws. As tax law changes, your tax preparation strategy may need to be modified, as well. 

It is reasonable to expect your tax preparer is taking some form of continuing education in order to maintain their credentials, or because it is a requirement of the job.  It is vital that your tax professional stay on top of the ever-evolving tax code. If you learn that they have not done so, then you should think about hiring a new tax professional. 

10)  Your Tax Professional Does Not Offer Any Tax Advice

When you compensate your tax preparer, you are not just paying for forms to be completed. You also should expect your tax professional to dispense relevant and helpful advice.  This helps you better understand the process that leads up to your tax refund or your tax obligation to the Federal Government. 

When you pay your tax professional, you should be receiving the benefit of his knowledge and expertise in the form of advice and guidance. Afterall, he has accrued a lot of hours of education and experience that affect his approach to preparing your taxes. The type of advice you might receive could include how to maximize your deductions or how to determine your amount of withholding. 

Much of the value you should be receiving from your tax professional includes sound advice, otherwise you are not getting your money’s worth. 

Look to Drilldown Solution for Expert Tax Planning Services for Your Small Business 

Drilldown Solution delivers a seamless tax planning and compliance process.  As is the case with all of our programs, tax planning solutions are custom-made based on an individual’s needs, wants, and the goals of your business.  You can expect your business to greatly benefit from our dedicated team of tax experts, ensuring your tax planning needs are met quickly and efficiently.  Our Provo, Utah Tax Planning Services are just what your small business needs. 

Drilldown Solution Can Help Your Small Business Accounting Needs 

Our accounting services are designed to reduce your administrative and bookkeeping burdens and provide you with valuable financial information to positively impact your financial situation.  

Our seasoned, highly skilled full-service accounting team at Drilldown Solution will remove your financial pain points with bookkeeping, business consulting, and tax planning  to make managing your cash flow easier. DrillDown Solution Tracks expenses, overseas cash flow, and discovers financial trends so you can effectively plan for the future of your business. 

We have the expert team to help any small business thrive, even under the current COVID-19 pandemic circumstances. We accomplish this with a three-part system of patient-experience excellence, financial focused operations, and accountability. 

Our goal at Drilldown Solution is to put your small business in the best financial position possible, utilizing proactive processes and personal care!

Heather Porter

DrillDown Solution was founded in 2004 and has helped thousands of people save on taxes and achieve their best financial position possible.

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