Tax Tactics

Storefront or Certified Professional: What to Consider When Choosing a Tax Preparer 

By Shaquana T. Lynum, CPA Managing Member of Thompson Lynum & Associations, LLC

Tax season is just around the corner and many individuals and small businesses are asking themselves: Who should file my tax return this year? The answer to this question depends on the complexity of your return and the quality of the tax preparer providing the service. Before you commit yourself to a specific individual or company, here are some questions and tips you should consider when choosing a tax professional:

Is this person qualified?

The IRS does not certify tax preparers. You should be aware that anyone that generally meets the minimal educational and state requirements has the ability to file a tax return for a fee. As determined by federal regulation, tax professionals face a series of penalties if they prepare returns incorrectly.

The following is a description of the type of specialists you may encounter during this tax season:

Storefront Preparers - This includes the big chains, like Jackson Hewitt or H&R Block, and even sole proprietors. These individuals are usually used for simple, straightforward tax returns and typically have credentialed and noncredentialed employees. Employees of these national chains have usually passed at least a tax preparation course, and the companies maintain that experienced supervisors review their work.

Certified Public Accountants (CPA) - A CPA is an individual who is certified by the state to act as a Public Accountant based on the completion of a state exam and practical experience. In addition to being certified, CPAs generally hold a Bachelors or Masters degree in Accounting and/or Finance. Many CPAs specialize in taxation and may represent you before the IRS. Some of the advantages of using a CPA to prepare your tax return include tax planning advice that can be provided throughout the year, they are knowledgeable of tax breaks, modifications and ramifications to new tax legislations, and alleviate the time and effort of doing it yourself.

Tax Clinics - Low Income Taxpayer Clinics (LITC) provides assistance for individuals whose income meets the income poverty guidelines and other criteria. LITC can provide representation before the IRS in court on audits, tax collection disputes, and other issues for free or for a small fee. If an individual’s native language is not English, some clinics can provide multilingual information about taxpayer rights and responsibilities. To find a tax clinic in your area visit for more information.

Now that you have a brief understanding of the different types of tax professionals that are available to you, it is important to also ask yourself the following questions:

Is this person or the company’s personnel available beyond the tax deadline?

It is important to know if the preparer will be accessible beyond the April 15th deadline. If the IRS has questions about your return, will this professional be available to assist you in responding to the inquiries.

Are you an aggressive or conservative taxpayer?

Do you like to take chances or do you like to play it safe? Many tax returns are cut and dry, but some financial situations could call for a tax professional to take either a more assertive stance or a subdued conventional method when determining the customer’s tax return. Make sure that you hire a preparer who agrees with your level of risk taking and that you understand the consequences of asserting a particular tax position. The key to defending a tax position is to maintain adequate support for deductions and credits taken in a tax return.

Avoid the following common pitfalls:

1. Guarantees of a large refund—Be aware of supposed tax authorities that claim they can give you a better refund on your return than their competitors. A preparer is not able to estimate your refund without reviewing your financial information. Avoid doing business with anyone who bases his or her fees on a percentage of your refund, which is illegal.

2. Fraudulent extra fees—Be aware of fees for “processing,” “document preparation,” and “service bureau” which are often used to pad the preparer’s bottom line. Ask for a fee list in advance and avoid anyone who refuses to give you one.

3. Refund-anticipation loans (RAL)—Also known as “instant refunds,” RALs are basically short-term loans that were designed to offer customers a quicker access to their funds than waiting for tax refunds. However, annual interest rates can reach almost 500%, consumers should avoid paying such an exorbitant tax preparation fee.

4. Refund debit cards—Tax preparers might offer an “instant refund” on a debit card, which can be loaded with fees. Certain debit cards charge a fee per transaction or a monthly fee for unlimited transactions.

Now that you are well equipped to make an informed decision, ask yourself again; who should file my tax return this year?



Leave a reply

Your email address will not be published. Required fields are marked *




We would love to hear from you. Send us an email and we'll get back to you, asap.


Log in with your credentials

Forgot your details?