How to Choose a Reliable and Trustworthy Tax Preparer?

Both individuals and businesses need professional services provided by tax preparers to calculate, prepare, and files taxes timely. More importantly, they understand the best practices to save taxes, and their recommendations with legally allowed tax deductions come in handy.


In addition to signing tax returns on behalf of the client, the tax preparer also defends the client’s tax returns during the Internal Revenue Service (IRS) examination. Often individuals hire a professional tax preparer when the time comes for filing tax returns. However, many businesses retain dedicated tax preparers to handle tax matters on an ongoing basis.

You can use any search engine and other CPA directories to find local and offshore tax preparers or accounting professionals. However, you cannot choose a reliable and trustworthy tax preparer based on the information posted only on their business website.

It is also important to gather information about the tax facilitator from both online and offline sources. Also, you need to assess the information based on a set of parameters to determine their competency and reliability.

7 Important Parameters to Assess a Tax Preparer’s Competency and Reliability

1. Tax Preparation Requirements

The Preparer Tax Identification Number (PTIN) issued by the IRS enables any professional to prepare and defend tax documents legally on behalf of both individuals and businesses. However, the tax documents can also be prepared and defended by Certified Public Accountants (CPAs), enrolled agents, tax attorneys, registered tax return preparers, and annual filing season program participants.

Hence, the tax preparers differ from each other in several aspects – qualification, certification, licensing, and representation rights. You must use the license and certification as the primary tool to check if the professional meets the latest tax preparation requirements exactly.

2. Professional History

There are always chances that the preparer may make changes to your tax return and file the altered tax return without your consent. The IRS advises individuals and businesses to report abusive tax preparers and suspected tax frauds. You must verify if any client has reported the professionals to be an abusive tax preparer.

However, it is also essential to check the professional’s background and history by checking with the Better Business Bureau (BBB), the state board of accountancy, or state bar association. The inquiry will help you to review the current status of the tax preparer’s license and know if the professional has a questionable history.

3. Representation Rights

The representation rights of a tax preparer can be either unlimited or limited. Most CPAs, attorneys, and enrolled agents have unlimited representation rights before the IRS. On the other hand, the PTIN holders and annual filing season program participants have limited representation right.

The preparer with unlimited representation right can represent the client on any matter, whereas the preparer with limited representation right can represent the client when the tax returns are being prepared and signed. You must check the representation rights of the professional to manage your tax matters efficiently.

4. Availability

Often individuals and businesses need the assistance of tax preparer to defend their tax returns and address concerns raised by the IRS. It will help if you opt for a professional whom you can contact even after filing the tax returns.

Also, you need to check if the preparer has adequate time to get the tax return reviewed by you and answer your questions.

Many busy tax preparers ask clients to sign blank tax forms to accelerate tax return filing. The IRS advises clients to avoid preparers who ask them to sign blank tax forms. While comparing professional tax facilitators, you must check if the professional is available before and after filing tax returns.

5. Tax Refunds Promised

Many scammers nowadays defraud innocent taxpayers by promising large tax refunds. While gathering information about tax preparers, you must check if the professional guarantees a large tax refund without verifying financial information.

Remember that no preparer can calculate and claim a tax refund without verifying the client’s financial information.

It is always important to check if the preparer asks clients to provide financial records and receipts. The professional also needs to calculate tax liability, deductions, and tax credit only after assessing financial information elaborately.

6. Cloud-Based Tax Software

The IRS recommends taxpayers to file tax returns electronically using IRS e-file. It even requires preparers to file clients’ tax returns electronically if they are preparing and filing more than 10 returns. However, you need to ensure that the preparer is filing your tax returns using Form W-2 instead of your last pay stub.

At the same time, it is also essential to check if the accounting or tax software used by the preparer is hosted in the cloud. The cloud-based tax software will help you to share and review the tax return and establish the accuracy. The optimized-level security provided by the cloud service provider will keep your sensitive financial data secured and inaccessible.

Also, if the tax preparer’s choice of the software is something that you are familiar with, then it will be better for you.

7. Service Fees

The IRS restricts tax preparers from pricing their professional services as a percentage of refunds. It even recommends taxpayers to avoid professionals who promise to get larger refunds. While comparing the price of tax preparation services, you need to ensure that the preparer is not asking to pay a percentage of refund as a fee.

You can always opt for a professional who offers tax preparation services by charging fees by the hour or by the number of forms. However, remember that the price of tax preparation services differs based on the preparer’s knowledge, expertise, and experience.

The IRS helps both individuals and businesses to choose the right tax preparer by sharing a set of useful tips. While comparing tax preparers, you must keep in mind these simple tips. However, it is also essential to assess the information collected from various sources elaborately to choose a tax preparer that is both competent and reliable.

Final Note

Once you decide if you need a professional to file the taxes then finalizing one requires an effort as well. When your finances data is to be shared, you would like to go ahead with a trusted party. One of the most reliable ways is a friend or colleague for the referral. If you are not finding a reliable referral, then the steps that we have mentioned above will solve your challenge.

About Julie Watson

Julie is a dynamic professional with over 16 years of rich experience as a VDI and Application Hosting expert. At Ace Cloud Hosting, she humanizes disruptive and emerging remote working trends to help leaders discover new and better possibilities for digital transformation and innovation by using cloud solutions with an enterprise-class security approach. Beyond work, Julie is a passionate surfer.
On the weekend, you will find her hanging out with her family or surfing around the North Shore of Oahu.

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Comments (1)

  • Jaxon says:

    Cloud-based tax software is much needed in today’s time when everyone is shifting to the cloud because of its security and redundant. Always consider this point.

    • Roy says:

      Also, always consider the views of the past and present clients as well. You would get some fantastic insights and will help in the decision-making process.

  • Rachel says:

    Availability of a tax preparer is essential. Please confirm this in advance so that you don’t face communication troubles when you need the tax preparer.

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