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Points To Keep In Mind While Selecting a Tax Preparer for your U.S. Tax Return

November 19, 2015

It is always good practice to start working on your taxes early. Not only does it provide you significant time to prepare your return, but can also allow for the exploration of various tax scenarios. However, for taxpayers with complicated tax returns that require professional assistance to prepare, the first step towards preparing their tax return is choosing the right tax return preparer.

We touched on some of these items in our previous article ‘Things That Your Tax Return Preparer Should Be Doing‘. There we discussed actions that could help you find the right tax professional for your returns, and help you decide whether to continue working with your current return preparer or look for someone else. Here are a few more points, based on a recent IRS article on selecting a tax preparer.

Character of the Tax Preparer

Personal characteristics can speak volumes about a person’s professional characteristics. Check to see if the return preparer has a good reputation in the market, and that their clients speak well of them. The person should be ethical and scrupulous.  Speak to the preparer about their privacy policies and inquire about their approach in determining filing positions.

Cost of the Tax Preparer’s Services

Do not shy away from asking about the fees.  If a preparer guarantees you higher refunds, and thereby charges you a percentage of the refund as fee, it is a good sign to select another return preparer since contingent fees based on tax savings are generally not allowed by the IRS.  A preparer should be upfront about their fees so that fee disputes upon finalizing the returns can be avoided.  Obtain a quote and request to be informed if the budget will be materially exceeded and the reasons as to why.

Tax Preparer’s Credentials

As per the IRS, a tax preparer charging fees for their services should have a preparer tax identification number (PTIN) to prepare a tax return. A taxpayer should consider asking the return preparer if they belong to any professional organizations, and how they keep up-to-date on their tax knowledge.

Check the Tax Preparer’s Background

A taxpayer can obtain details of a tax preparer’s work history through the Better Business Bureau.  If a tax preparer claims they are an Enrolled Agent, a taxpayer may verify their license with the state accounting bodies or from IRS’ Office of Enrollment to ensure that the return preparer qualifies in return preparation and representation.

Is the Tax Preparer E-file Capable?

E-filing is environmentally friendly and convenient, not only for the return preparer but also for the taxpayer. It allows for faster processing and can provide confirmation that the return has been filed on time. Therefore it is recommended that the taxpayer should inquire his tax preparer about the firm’s e-filing capabilities.  Note that not all returns can be e-filed. The IRS generally requires that if the tax preparer is preparing and filing more than 10 returns, they must do so electronically.

Does the Tax Preparer Give Priority to Proper Documentation & Record keeping?

A good preparer should be able to provide the taxpayer with an organizer or document that helps the taxpayer compile tax information. A preparer who does not ask for the taxpayer’s W-2 form for income and other official income tax slips received during the tax year and is willing to prepare the return based on the pay stub or wage information provided verbally by the taxpayer should not be used since such practices may be against IRS rules.

The Tax Preparer Should be Available Throughout the Year

A taxpayer is allowed to designate another person, such as the return preparer, as the one to deal with any IRS queries related to their taxes and tax return. Therefore, check whether  the tax preparer is available throughout the year.  If so, you may choose to authorize the preparer by checking the third party authorization checkbox on Form 1040, Form 1040A or Form 1040EZ (as required). This allows the preparer to receive and respond to IRS queries for one year from the original due date of the return (ignoring extensions).

The Tax Preparer Should Review the Tax Return and Resolve Any Doubts

Even though the return is prepared by someone else, the IRS states that the taxpayer is responsible for every detail provided on the return. Therefore once the return has been prepared, the preparer should resolve any issues regarding questionable deductions, credits, gains, losses, income, or expense items claimed before having the taxpayer sign and file the return.  This is to increase the accuracy of the return filed, and in the case that the IRS questions the return the taxpayer will already be aware of the potential issues.

That being said, on reviewing the return, the preparer should check that no field is left blank that should be filled in, such as account details for direct deposit of refund. Once agreed the tax preparer should sign and provide their PTIN to confirm that they have prepared the return. Once filed, a copy of the return should be provided to the taxpayer.

These are just some of the few crucial points that a taxpayer should keep in mind before choosing a tax preparer.  While this article speaks specifically in regards to U.S. tax preparers, much of the general advice can be applied to Canadian tax preparers as well.  An inexperienced or unqualified preparer could cost a taxpayer significantly, both financially as well as mentally, by not following basic guidelines and creating avoidable tax situations. Looking for a new tax return preparer to sort out issues that should have been avoidable, or managing it on their own, can be both time-consuming and challenging.


If you have any other tax-related queries, and/or need assistance with tax planning/filing please contact AG Tax. Our tax professionals are highly-experienced with U.S. and Canadian tax laws and can provide you the right guidance to handle your tax situation.

Aylett Grant Tax LLP is a full service accounting firm with a dedicated team of experts, who are highly-qualified and experienced in handling situations related to U.S., Canada and other international tax laws.

We can assist with:

  • Canadian Personal and corporate tax returns
  • Cross Border Taxation and Business Planning
  • Personal and Corporate Taxation
  • Disclosure of Foreign Assets and other information filings
  • Retirement planning
  • Estate Planning, Inheritance tax advice

Please contact any of our offices across Canada at 604-538-8735 (Greater Vancouver), 780-702-2732 (Edmonton and Alberta), or 416-238-5920 (Greater Toronto) to arrange for an appointment to discuss your tax related queries.

Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.

ABOUTAylett Grant Tax, LLP
With offices across Canada, we are positioned to manage and process the full scope of your Canadian, US and US Canada cross-border tax filing needs.
12752 28th Ave, Surrey, BC, V4A 2P4
104–4220 98 St NW Edmonton AB, T6E 6A1
With offices across Canada, we are positioned to manage and process the full scope of your Canadian, US and US Canada cross-border tax filing needs.
12752 28th Ave, Surrey, BC, V4A 2P4
104–4220 98 St NW Edmonton AB, T6E 6A1

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