If you're thinking about enlisting the help of a professional tax preparer for the first time or are searching for someone new because you're not satisfied with the service you're getting from you current preparer, follow these five steps.
Step 1: Get a Referral
Barksdale says his firm's number-one source of new clients comes from referrals from existing clients. So ask your friends, family and colleagues whether they can recommend a tax preparer.
If you are new to an area, check with your state's CPA society, which should be able to help you find a CPA in your area, the Accreditation Council's Web site for an accredited tax adviser or preparer, or the National Association of Enrolled Agents' directory.
Then narrow your list of recommended tax preparers down to two or three candidates, who you will then call or visit for an interview.
Step 2: Interview Candidates
If you're trying to hire a new tax preparer in the midst of tax season, you might have a hard time finding someone who can sit down with you in his or her office for a long interview, warns Michael Eisenberg, CPA/PFS and founder of Eisenberg Financial Advisors in Los Angeles.
However, most tax preparers should have time for a phone interview of 20 to 30 minutes. If they aren't willing to give you a few minutes on the phone -- or want to charge you for the initial interview -- then look elsewhere.
"You want somebody who is willing to listen to you, hear what you're saying and answer your questions in plain English," Eisenberg says.
Here are some key questions to ask:
1. How long have you been in practice? You want someone who has been preparing returns long enough (i.e. several years) to anticipate problems or IRS challenges.
2. What are your credentials?
Check your state's licensing board and professional associations (see step 1) to assure that he or she is licensed, is a member in good standing and has had no disciplinary action taken against him or her.
3. Do you have any specialties?
4. How much will you charge? Eisenberg says you probably won't get an exact number, but a tax preparer should be able to provide you with an estimate. Find out if he or she charges an hourly rate or flat fee and whether that fee will cover everything or will there be add-ons for planning meetings and calls throughout the year.
5. Do you have room for a new client? Or, more importantly, will you file my return in a timely manner? And will you have time to meet with me throughout the year?
"If you hear from them just once a year, that's probably a problem," Barksdale says.
6. Will you handle my return, or will you hand it off to a less-experienced associate? If the preparer is part of a firm and will not be preparing your return personally, ask if he or she will review it after the associate completes it.
7. Will you represent me before the IRS? "Run out the door if the answer is no," Eisenberg says. If you are audited, you want someone who will defend your return.
Step 3: Watch for Red Flags
Steer clear of anyone who talks about cheating the IRS. Or a preparer who pushes you to take deductions, says you don't have to report certain income or promises to get a refund that will be a certain percentage of what you earn.
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