Tips for Finding a Tax Professional for Every Occasion

When it comes to seeking advice or preparing a propane or fuel oil operation’s tax returns, the complex, ever-changing tax rules make doing it without help extremely risky. While off-the-shelf software or more expensive custom software are frequently used, professional help is almost a necessity.

Most propane marketers use a professional at some point — most commonly to prepare tax returns. In fact, according to the Internal Revenue Service (IRS), more than half of all returns filed were filed by tax professionals. For those without professional help — or those seeking to change tax professionals — finding a professional should be more than a search for the least expensive or most convenient. The first question is what kind of tax professional is required?

When it comes to help with tax preparation or tax questions, the IRS offers free advice — but it is free advice at a price and often difficult to obtain. The IRS will not advocate aggressive tax solutions, nor can their answers be taken as gospel. In fact, the IRS will not stand behind incorrect advice or even its erroneous interpretation of its own rules.

While anyone can be a paid tax return preparer — as long as they have an IRS Preparer Tax Identification Number (PTIN) — there are various types of tax return preparers with differing levels of skills, education and expertise. Bookkeepers are great for the day-to-day recordkeeping of a business. Accountants, on the other hand, usually crunch the bookkeeper’s numbers, translating — even evaluating — those figures into a format understandable and usable by the average business owner, shareholder or manager. When dealing with an accountant, don’t underestimate the importance of a certified public accountant (CPA).

Passing the CPA examination is frequently a guarantee of a certain level of abilities. Most states require CPAs to have at least a college degree or its equivalent. Many, in fact, require post-graduate work.

While many CPAs advise and prepare returns, keep in mind that the CPA designation does not require a special knowledge of our tax laws. Although CPAs and attorneys are permitted to practice before the IRS and the tax courts, another group of professionals — enrolled agents (EAs) — must demonstrate their knowledge of taxes to represent taxpayers in those venues.

The IRS requires EAs to have a certain level of competence and adherence to rigid professional standards, as well as relying on continuing professional education to maintain skills. It is the IRS, not a local association of professionals, that tests, monitors and polices EAs.

Generally, the experts suggest that it is best to find a professional focusing on clients that mirror your situation. Smaller tax return preparers and national chains, such as H&R Block, tend to focus on individuals, professionals and smaller-sized businesses. Midsized CPA firms usually specialize in mid-to-large-scale regional businesses and high-income individuals. National CPA firms are geared to servicing very large companies and their top employees.

Typically, attorneys specializing in tax law are not ardent disciples of tax return preparation. Such legal professionals are most often confined to complex transaction issues and document preparation. For issues requiring absolute confidentiality, consider the use of attorneys who enjoy legal extremes of data protection.

The best way to find someone to prepare the operation’s tax returns or to render needed tax advice is to get a referral from business associates, the business’s banker or its attorney. If more possibilities are needed, every state has professional associations, including organizations such as:

• American Academy of Attorney-CPAs (AAA-CPA) is the only organization made up of individuals who are dually qualified as attorneys and as CPAs.
• American Institute of Certified Public Accountants (AICPA) is the world’s largest member association representing the accounting profession.
• National Association of Enrolled Agents (NAEA) is a professional society representing EAs, America’s “tax experts.”
• National Association of Tax Professionals (NATP) claims to be the largest nonprofit organization with members of all 50 states focusing specifically on federal tax preparation.
• National Conference of CPA Practitioners (NCCPAP) is a professional organization representing over 1 million business and individual clients that monitors and influences tax administration and policy by meeting with IRS representatives and state taxing authorities, as well as national and state elected officials.
• National Society of Accountants (NSA), along with its state affiliates, represent independent practitioners who provide accounting, tax, auditing, financial and estate planning and management services to 19 million individuals and businesses. NSA members are required to pursue continuing professional education to stay current on tax laws and skilled in client service areas.
• National Society of Tax Professionals (NSTP) assists members in attaining the expertise, proficiency and competency in all areas of tax compliance while preparing its members to be qualified to effectively provide professional tax preparation services for clients.

Remember, the professional used for tax advice need not be the same used for preparing the propane or fuel oil operation’s tax returns.

Checking & Complaining

It should go without saying that the tax preparer’s qualifications and history should be checked. Asking the right questions, often during the free initial conference offered by most professionals, can help assess not only the needs of the business, but also determine whether the professional will be a good fit for you.

While few organizations will provide reviews of their members, the IRS’s Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can often help in the search for professional tax help. The information in this directory is all that is publicly available and there are many other valid tax return preparers who have a current year preparer tax identification number from the IRS who are not listed.

Tax return preparer fraud is among the list of common tax scams. The IRS provides tips on avoiding unscrupulous tax return preparers and investigates paid tax return preparers who act improperly.

However, any propane marketer or business financially impacted by a tax return preparer’s misconduct or improper tax preparation practices can make a formal complaint to the IRS. To report abusive tax return preparers or suspected tax fraud, the IRS’s Form 14157, Return Preparer Complaint, and Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit, are used by individuals, sole proprietors and single-member LLCs to report misconduct.

Although these forms don’t let anyone off the hook for paying taxes owed, they allow every individual, sole proprietor and single-member LLC to anonymously report tax preparer misconduct.

Expanded Help Window

Since business (and life) happens year-round, not just at tax time, access to the tax professional for needed guidance year-round is almost essential. If problems arise with the tax return, the professional should be able to address them. If there is an IRS audit, the professional should be available and able to guide the propane or fuel oil business owner or manager through the process.

An important step to finding the right professional requires an inventory of what the business needs in the way of services and advice and, most importantly, how much it can afford to pay for that advice or services. It is important to determine beforehand just how much of the work you and the operation’s employees will do and how much of it will be done by the professional — or professionals.

Shopping for a professional is virtually a necessity in today’s business economy. Fortunately, many professionals offer free first meetings for discussion of expectations, services needed and provided, extent of involvement by the professional and the portion of the work the operation’s employees expect to shoulder, time constraints and, above all, costs. While it is not “tacky” to discuss fees before engaging the services of a professional, money should not be the sole criteria for selecting that professional.

Comparison shopping to find a tax professional who can provide the level of service you require at a price that the business — and you — can afford is a process that should begin immediately. But keep in mind when you sign that tax return, you become responsible for everything on it — even if someone else prepared it.