5 Considerations When Hiring a Tax Advisor

From Block Advisors

Our comments will be interleaved.

With so many Tax Advisors to choose from, where do you begin in your quest to find someone who suits your unique needs?

There are multiple online services available for filing your taxes, but if you have a complex tax return “do it yourself” might not be the right path to follow. And, with 1.3 million accountants in America to choose from, where do you begin in your quest to find a Tax Advisor who suits your unique needs?

If you don’t have the time or expertise to spend completing your yearly taxes, here are the questions you should ask to find the right one for you:

1) “What’s Your Tax Background?”

First, define a Tax Advisor’s credibility by asking for professional credentials and background. Experience is key when it comes to taxes and year-round accounting services.

Certifications are critical when it comes to tax and accounting. It’s all about acronyms:

CPA: A certified public accountant, or CPA, is certified to act as a public accountant. A CPA is the only licensed qualification in accounting and is granted after you pass an exam. CPAs can practice in other areas of accountancy besides taxes, too.

EA: An enrolled agent (EA) can legally represent taxpayers before the Internal Revenue Service by either passing an IRS test or through experience as a former IRS employee.

We work under the supervision of an Enrolled Agent who can represent you before the Internal Revenue Service.*

Additional Credentials:

  • PTIN: Any person authorized by the IRS to prepare your tax return for a fee needs to have a Preparer Tax Identification Number, or PTIN (P01584295)
  • CRTP: We are a bonded Annual Tax Season Filer and licensed to prepare California State taxes by passing a separate exam. (CTEC #A254618)

Another good question is this: “How long have they been preparing returns and what courses have they completed?” It’s critical to select a Tax Advisor with experience or in-field expertise under his or her belt… Tax advisors have a range of backgrounds, so ask questions that vet qualifications based on your unique needs.

  • We have been preparing and analyzing tax returns since 1973.
  • We have 15 years of bank lending experience and 10 years of California Real Estate Broker experience.
  • We have a law degree.
  • We are a student in a post-law degree tax program in Wealth Management and Financial Services, including family, corporation, LLC and nonprofit organization coursework.

2) “What is Your Payment Structure?”

Accountants and Tax Advisors can charge in a variety of ways: by the hour, by the return, by the complexity of forms filed, or even by a percentage of the total amount of your refund (a practice that has been penalized). While you might not get a hard number of the amount you will owe, establish the context of cost so you are not surprised down the road.

Also, be suspicious if a Tax Advisor says they can get you a bigger refund than what you have the right to claim.

Our fees are comparable in the local market. We estimate how much time your return will take and assign an hourly value to that figure at the rate of $50 per hour, a very low rate for our professional background and educational attainments. Your prompt and thorough compliance with our requests will keep your final bill lower than otherwise.

3) “How Do You File Taxes?”

Most individuals prefer e-filing a tax return, yet many Tax Advisors will mail them. Pre-define the method of filing your taxes with a potential advisor. (Note: Generally, a paid tax preparer who files 11 or more tax returns is required to file electronically.)

We will file electronically for you unless you have another preference. We are happy to comply with your instructions and comply with your security regime.

4) “When Are You Available?”

Availability is important. First ask: “What is your typical response time?”

Our typical return turnaround time is  7-10 days. Emergency services are available at a modest extra fee.

Ask: “What is your availability year-round?”

Our offices are open all year long, and our typical response time is 24 hours or less.

5) “What Happens if a Client Gets Audited?”

Every individual fears an audit after filing a return, but you need to ask how the tax advisor handles audits. Will the advisor represent your case to the IRS? What about the cost to fix mistakes… How do they calculate this?

Most “audits” consist merely of a letter requesting clarification of your return. Uncomplicated situations will be managed without additional charge. Continued work will be charged at $50 per hour. Should you require direct representation, we work under the supervision of an Enrolled Agent, who may be available to represent you in front of the IRS for an additional fee. 

All in all, finding a quality Tax Advisor can be tricky. If you want more resources to help make your decision, check out this article from the IRS.

*An Enrolled Agent is the equivalent of a CPA or a Tax Attorney in the eyes of the IRS. EAs work under a separate agreement and fee structure from we tax preparers. EAs pass rigorous examinations and are licensed to practice in front of the IRS. EAs are not IRS employees. EAs can help you through any audit process until it reaches Federal Tax Court, very much a rarity. At that point a Tax Attorney should be retained.

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