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Here's What You Must Remember When Choosing a Tax Professional

by
Sonu Shukla
on
6/16/2022
Here's What You Must Remember When Choosing a Tax Professional

You'd be hard-pressed to find someone who would argue against the idea that the United States tax system is equal parts convoluted and frustrating. This is true both for private individuals and especially for small business owners. Things can change quickly, to the point where you've likely considered enlisting the help of a tax professional if you have yet to already do so.

While this is always a good idea to make sure that no issues happen during the preparation and filing processes, one of the most important things for you to understand is that not all tax professionals are created equally. If you truly want to make sure you're finding a provider who can meet your needs (and aren't ending up with one of the many bad actors out there), there are a number of critical things to keep in mind.

Finding the Right Tax Professional: An Overview

Some people out there may find themselves asking "is it really that difficult to find a tax professional out there who doesn't have malicious intentions?" The answer, sadly, is often "yes."

Case in point: a tax preparer in South Florida was recently sentenced to 18 months in prison for tax fraud. The man "grossly underestimated the income from his business" for the tax years 2014 and 2015 and failed to file altogether in 2016. It was estimated that he owed approximately $1.289 million in federal back taxes for that period of time.

A similar story took place in Orange County, where two tax preparers were recently charged in a long-running income tax and benefit fraud scheme in conjunction with an equally corrupt social worker from the area. The trio stole Social Security numbers and other personal identifying information from clients - many of whom were immigrants - for the purposes of tax fraud, among others.

All of this is to say that, sadly, these types of situations are a lot more common than most people realize. That's not to say that you should eschew hiring a professional in an attempt to file your taxes on your own. Especially for a small business owner who already has a lot on their plate, this is never recommended. It's just that when you do go looking for a partner to help in this regard, there are a few key things you'll need to know.

Chief among them has to do with the type of tax professional you need in the first place. One type is called an Enrolled Agent, otherwise known as an EA. This is someone who has passed a difficult test to earn this title, has at least five years of experience working for the IRS or, in some cases, both. In addition to tax preparation, they also often offer bookkeeping and other services.

Next, you have a CPA, or Certified Public Accountant. This will be a professional registered in your state who can complete business-related tax work and other sophisticated accounting needs.

For the best results, you'll want to find a professional who does more than just offer basic tax preparation and filing services. In the event that you are ever audited by the IRS, this person should be willing to give you advice so that everything proceeds as smoothly as possible. They should also be able to represent you in matters that happen before the IRS so that you don't have to worry about them at all. You're a business owner, don't forget - you're not necessarily a pro at dealing with Uncle Sam. These tax experts are, however, which is why a good one will always be willing to step in on your behalf.

To make the process of finding a tax pro easier, you'll also want to investigate local bar associations and CPA societies in your area. This can be a great way to find not only Enrolled Agents but CPAs as well. Referral panels are another way to accomplish much the same thing and they can turn you into an entire pool of potential candidates that you may have otherwise been unaware of.

Finally, you'll want to make sure that any tax professional you choose has not just experience, but experience in the specific industry that you're operating in. You need someone who understands the inner workings of a business like yours in fine detail, along with the unique tax credits (and liabilities) that you may be subject to. Ask them to confirm that they've worked with organizations like yours in the past to make sure you're getting someone who can meet your needs over the long- term.

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Sonu Shukla

Sonu Shukla

Sonu Shukla is a CPA, accountant, and tax preparer based in Orlando, FL. Sonu Shukla can assist you with your tax preparation and planning needs. Sonu is more than just another accountant in Orlando, Florida; he is a small business owner himself. It is a position in life that grants him the perspective and insight to emphasize with his clients, bringing them the best service possible. A Certified Public Accountant and a Certified Financial Planner, Sonu possesses the skills, education and experience to demonstrate unerring business acumen and passionately planned financial strategies. Being proactive is key for Sonu, tailoring highly efficient tax plans for his small business clients, all in a one on one environment where he and the client can bounce ideas around until every detail is worked out.

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