Income tax preparation .
When it is time to pay taxes, many Americans consider getting help from an income tax preparation service. These services, however, may vary greatly in accuracy and cost.
The following information may help taxpayers decide whether they need tax preparers and, if so, how to select tax preparers that best suit taxpayers' needs.
The need for a tax preparer
The local IRS office will help prepare income tax forms, and taxpayers can receive answers to questions by using the IRS' free information resources.
For additional information concerning free services provided by the IRS, contact the local IRS office by calling toll free (800) 829-1040.
However, if taxpayers do not feel qualified to prepare their taxes, or tax situations are so complex that taxpayers do not feel comfortable preparing the taxes themselves, they may want to consult a tax preparer.
Before taxpayers retain tax preparers, it is best to determine what type of service is needed and then choose the tax preparer who can best perform the service needed for the least amount of money.
Types of preparers
There are four basic types of professional tax preparers: enrolled agent, certified public accountant (CPA), attorney, and tax preparer.
Enrolled agent. Enrolled agents are certified by the IRS after having worked five years or more as IRS auditors or after having passed a government exam. Enrolled agents are authorized to represent taxpayers before the IRS.
Certified public accountant. CPAs have passed a professional qualifying exam and are authorized to represent taxpayers before the IRS. Public accountants (PAs) generally have special accounting training but they lack certification and cannot represent taxpayers before the IRS.
Attorney. Attorneys who have passed the bar exam are authorized to represent taxpayers before the IRS, but they may or may not have special tax training.
Tax preparer. Tax preparers may or may not have special training or experience. Some tax preparation firms require that their tax preparers have extensive training and experience, but others require very little.
Although, generally, tax preparers cannot represent taxpayers before the IRS, they can answer questions regarding how returns were prepared and filed.