After you become a tax preparer, the best way to attract clients is giving them instructions about how to find superior tax services. The next step is then to simply position yourself as ideally meeting the selection guidelines.
The IRS has issued six tips about choosing a professional for tax return preparer work. Using these same points helps you educate taxpayers. These are the IRS recommendations when examining a tax preparer list:
Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.
Avoid preparers who base their fee on a percentage of the refund.
Use a reputable tax professional who signs the tax return and provides a copy.
Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months, or even years, after the return has been filed.
Check the person's credentials. Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
A notable feature of this list is what's missing. It does not contain a directive to examine every detail about a taxpayer's deduction claims. Any tax return preparer who charges by the hour can easily run up the bill for clients by asking for receipts, cancelled checks, or other forms of substantiation. Gathering these details is only necessary for an IRS examination. Unless a tax practitioner is hired to conduct an audit of a taxpayer's records, the professional services should not create extra charges for partial auditing. The public should know about the potential for such bill padding by unscrupulous hourly rate professionals.
However, a duty of tax preparer ethics is reminding individuals to retain records that support the numbers they provided to you. You probably only need to examine receipts if a taxpayer seems confused, uncertain, or contradictory. Your responsibility entails making a reasonable inquiry into the facts and circumstances. But, taxpayers normally don't need to present you with proof about their claims for deductions.
Keep in mind that the IRS permits taxpayers to make reasonable estimates of expenses when their records have been lost due to natural disaster. Conducting a tax return preparer job merely demands that you have reason to believe a person's statement about a deduction is true. If you know that a taxpayer is using estimates, attach a disclosure statement to the tax return. The taxpayer's signature on the return confirms that estimates are provided. You should terminate the relationship and not prepare the tax return only if you believe a client is lying about tax information.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.
No comments:
Post a Comment