Your Tax & Business Advisor
Selecting a Tax Advisor

By Raymond S. Kulzick, CPA, DBA
As published in the Pinecrest Tribune. March 30, 1998. 

  

How should I choose a tax advisor?

IThe average American turns over 35.2% of his or her income to state, local, and federal tax collectors. Selecting the best person to provide tax advice and prepare your tax returns should be a critical part of your financial planning.

You have lots of choices, so consider these factors about your tax advisor: level of education (initial and continuing), government licensure, experience, breadth of practice, and availability year-round to answer your questions.

If your return is very simple, for example just a W-2, the IRS encourages you to do it yourself. In fact, you probably can use the tele-file system and file your return by phone. Some people are willing to devote the time and effort to learn and keep up with the ever-changing tax laws and can do more complex returns themselves. Tax programs, such as TurboTax and TaxCut can assist those who have an understanding of the tax laws, but generally will not help those who aren't knowledgeable and have more complicated returns.

Unregulated tax preparers offer the least expensive assistance. However, in Florida anyone can claim to be a "tax expert" or "accountant" and prepare taxes for others. Since these preparers are not licensed, not required to meet any standards, and don't need to have any minimum educational level at all, quality varies greatly. Most use temporary, seasonal employees. Several large chains do provide a year-round presence (although not necessarily at the same office), some education, and some level of quality control.

If you have a complicated return, may be effected by tax law changes, or need tax planning, three types of licensed and regulated professionals can help: Attorneys, Enrolled Agents (EAs), and Certified Public Accountants (CPAs). All three must pass rigorous examinations, meet minimum education and continuing education requirements, and can represent you before the IRS if you're audited.

An enrolled agent is tested and licensed by the IRS specifically on tax law and regulation. Many are former IRS employees. In addition to the examination, they must complete 72 hours of continuing education every three years. EAs are usually very knowledgeable and experienced in federal taxes.

A Certified Public Accountant is licensed by the State of Florida and must have the equivalent of a bachelor's degree in accounting and 30 credits of additional education. Many have master's degrees. They must pass a national examination and complete a minimum of 80 hours of continuing education every two years. They are regulated by the State and must meet numerous requirements in their practices. In general, CPAs remain available all year and have broader knowledge than EAs.

Some attorneys specialize in taxation and might prepare returns. Tax attorneys are frequently used in conjunction with CPAs for tax and estate planning, in complex tax circumstances, and in situations with legal as well as tax consequences. An experienced tax attorney should always be used in criminal tax cases. Attorneys are licensed and regulated by the State of Florida and are required to meet specific education and continuing education standards. The Florida Bar Association also has a certification program in the area of tax law.

Regardless of whom you select, professional help should ease the headache of preparing your returns and offer reliable advice for future tax planning. If you want to save money on taxes, don't just think about it in April.

Raymond S. Kulzick is a CPA, and technology and management consultant with offices in Pinecrest at 12177 S. Dixie Highway. If you have questions or suggestions for future columns, please contact him at 305-233-2280 or rkulzick@kulzick.com. More information is also available on the firm's Web site at http://www.kulzick.com/businesspro.

This article provides information of a general nature only and should not be acted upon without seeking appropriate professional advice concerning your specific situation.

© Copyright 1998 Raymond S. Kulzick. All rights reserved. 980330.

 

This publication provides business, financial planning, and/or tax information to our clients. All material is for general information only and should not be acted upon without seeking appropriate professional assistance.

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Copyright © 1998 Kulzick Associates, PA - Last modified: September 13, 2008