Tax Professionals

IRS Recommendations on Choosing A Tax Preparer

If you decide to have a tax preparer file your income tax return, it is important to choose that person carefully. You may be eligible to use a volunteer tax return preparer through a program such as the IRS Volunteer Income Tax Assistance Program (VITA). However, if you decide to use a paid tax preparer, it is important that you find a qualified tax professional and remember that you are responsible for everything on your return even when it is prepared by someone else.
Tips for Choosing a Preparer

While most tax return preparers are professional and honest, taxpayers can use the following tips to choose a preparer who will offer the best service for their tax preparation needs.

  • Plan ahead – Choose a preparer you will be able to contact after the return is filed and one who will be responsive to your needs.
  • Get references – Ask questions and get references from clients who have used the tax professional before. Were they satisfied with the service received?
  • Research – Check to see if the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for Certified Public Accountants (CPA) or the state’s bar association for attorneys. You can contact these organizations by looking in your local telephone directory or on the Internet.
  • Determine if the preparer’s qualifications meet your needs – Is the preparer an Enrolled Agent (EA), Certified Public Accountant (CPA) or Attorney? Only EAs, CPAs and attorneys can represent taxpayers before the IRS in all matters including audits, collection actions and appeals. Other return preparers may represent taxpayers only in audits regarding a return they signed as a preparer.
  • Ask about tax preparation fees – Try to obtain a clear estimate, preferably in writing, for the preparation and filing services.
  • Understand Refund Anticipation Loans (RALs) – RALs come with expensive fees and if you e-file your tax return with the IRS, you can get your full refund directly from the IRS in as few as 10 days – without having to pay any loan fees.
  • Obtain a signed copy of your return – It’s key to obtain a signed copy of your tax return from your preparer to protect your tax refund and guard against tax return fraud.
Make sure your preparer fully explains every form you are asked to sign. In addition, ask your preparer about the use and disclosure of your personal tax return information.

Understanding Tax Return Preparer Credentials and Qualifications

Any tax professional with an IRS Preparer Tax Identification Number (PTIN) is authorized to prepare federal tax returns. However, tax professionals have differing levels of skills, education and expertise.

An important difference in the types of practitioners is “representation rights”. Here is guidance on each credential and qualification:

UNLIMITED REPRESENTATION RIGHTS: Enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS.  Tax professionals with these credentials may represent their clients on any matters including audits, payment/collection issues, and appeals.

Enrolled Agent

Enrolled Agents – Licensed by the IRS. Enrolled agents are subject to a suitability check and must pass a three-part Special Enrollment Examination, which is a comprehensive exam that requires them to demonstrate proficiency in federal tax planning, individual and business tax return preparation, and representation. They must  complete 72 hours of continuing education every 3 years.

EA's also have the privilege of representing a taxpayer from any state or territory of the United States before any division of the IRS.

LIMITED REPRESENTATION RIGHTS: Preparers without one of the above credentials (also known as “unenrolled preparers”) have limited practice rights. They may only represent clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees, including the Taxpayer Advocate Service. They cannot represent clients whose returns they did not prepare and they cannot represent clients regarding appeals or collection issues even if they did prepare the return in question.

AFSP Participants

Annual Filing Season Program Participants – The Annual Filing Season Program is a voluntary program designed to encourage tax return preparers to participate in continuing education (CE) courses. Unenrolled return preparers can elect to voluntarily take continuing education each year in preparation for filing season and receive an Annual Filing Season Program – Record of Completion. The program is important for a number of reasons. It encourages unregulated return preparers who don’t have to meet continuing professional education requirements to stay up to date on tax laws and changes. It helps lessen the risk to taxpayers from preparers who have no education in federal tax law or filing requirements. And it allows preparers without professional credentials to stand out from the competition by giving them a recognizable record of completion that they can show to their clients.

Only AFSP participants who obtain a Record of Completion will have limited representation rights before the IRS for clients whose returns they prepared and signed. PTIN holders without an AFSP - Record of Completion or without other professional credentials will not be able to represent clients before the IRS in any matters.

DIRECTORY OF FEDERAL TAX RETURN PREPARERS WITH CREDENTIALS AND SELECT QUALIFICATIONS: To help taxpayers determine return preparer credentials and qualifications, the IRS has a public directory on the IRS website. The searchable, sortable database contains the name, city, state, and zip code of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, and enrolled actuaries with valid PTINs, as well as AFSP Record of Completion recipients.

Continuing Eduation Requirements

Certfied Public Accountants (CPA)

Certified Public Accountants in Ohio:

(per Accountancy Board of Ohio)

The basic continuing professional education (CPE) requirement to obtain or renew the Ohio permit is 120 credits over a three-year period. New CPAs holding the Ohio permit are required to report 40 credits over a two-year period. A new CPA licensed in 2011, for example, will have a continuing education reporting period of January 1, 2011 through December 31, 2012 and a requirement of 40 credits.

Continuing education is due on the license renewal date for all Ohio permit holders.

All continuing education reporting periods (24 and 36 months) begin on January 1 and end on December 31.

Continuing education may be earned in any field that contributes to a licensee's professional competence. Registered CPE sponsors agree to conform to the NASBA/AICPA CPE Standards, and this includes keeping appropriate documentation for CPE verification purposes.

Each licensee holding the Ohio permit is responsible for retaining appropriate documentation for all CPE credit claimed. There should be adequate support for completion and CPE credit claimed. Normally, a certificate of completion is issued by the program sponsor as proof of attendance/completion. Some sponsors issue a transcript that serves as documentation for all the programs taken by a licensee from that sponsor.

The following Ohio permit holders must earn 24 CPE credits in accounting or auditing:

  • CPAs or PAs who work on financial reporting engagements.
  • CPAs or PAs who perform financial reporting work outside public accounting while using the CPA designation ("regulated services").

The following Ohio permit holders must earn 24 CPE credits in taxation:

  • CPAs or PAs who work on taxation engagements or provide tax advice to clients.
  • CPAs or PAs who perform tax work outside public accounting while using the CPA designation ("regulated services").

All CPAs holding the Ohio permit must take 3 credits in professional standards and responsibilities ("PSR") each reporting period. CPE sponsors that wish to present courses in Ohio professional standards and responsibilities must register with the Board, submit all course materials and qualifications of the instructor or CPE program designers to the Board for review and approval.

A licensee may claim PSR credit for programs in the following four areas if the course is Board approved and documentation is retained: (1) the Ohio accountancy law and rules, (2) the accountancy law and rules of another state, (3) professional ethics for CPAs, or (4) ethical philosophy.

The Administrative Code reference is:

Do you know if your preparer is legitimate?
There are clues:

If you pay anyone to prepare your return, they MUST have a PTIN
(Preparer Tax Identification Number).

The PTIN is formatted as P00000000
an eight digit number preceded by the letter "P".

If you suspect your preparer was not a legitimate paid preparer,
take a look and see if they put their PTIN on the return.

Look for the section called "Paid Preparer Use Only".  Look for the box with the heading PTIN
The number in the box should be a P followed by 8 numerals.