3 Types of Tax Preparers

3 Types of Tax Preparers

Every year when tax season comes around, we all struggle with one question: Should we give it a go ourselves or hire a tax professional?

If you’ve been filing your tax returns for a while now and are accustomed to the procedures, you can do it yourself. However, if you’re a newbie filer or don’t have much time on your hands, you are better off with a tax preparer.

Learning about the different types of tax preparers will help you in this task, especially since you don’t want to pay for the expertise you don’t need.

Enrolled Agents

Enrolled agents are the IRS's highest-ranking employees. To achieve EA status, they must pass a challenging IRS-sponsored exam and undergo an extensive background check.

EAs have unrestricted practice rights, which means they can represent clients in front of the IRS in any unit. They are the powerhouses, capable of handling returns of any complexities and even representing you if you are audited or face IRS collection demands.

An EA's tax knowledge is usually comparable to a certified public accountant’s, but EAs charge less, making them a cost-effective option.

CPA (Certified Public Accountants)

You have many options regarding the work a CPA credential can do for you. CPAs sign audit reports, provide attestation services, prepare financial statements, and provide tax advice.

Moreover, CPA tax specialists can also prepare and plan taxes. Their clients also have unrestricted representation rights before the IRS in their clients' cases. So, if you're looking for someone with some professional flexibility, hiring a CPA is a good option.

Keep in mind, however, that the CPA is a state-issued license. If you want to work in multiple states without reciprocity agreements, you'll need to obtain a license in each one.

Non-Credentialed Tax Preparers

A non-credentialed tax preparer does not have professional qualifications or certifications from an independent organization like the AICPA, the IRS, or the Bar Association. Seasonal tax preparers who work in tax stores and IRS Volunteer Income Tax Assistance Program are common examples.

The Annual Filing Season Program is a voluntary program offered by the IRS for non-credentialed tax preparers. Participants receive an IRS record of completion certificate after completing eighteen hours of continuing education, including a six-hour refresher course in federal tax law.

Non-credentialed tax preparers must take tax education courses in ten states before registering as tax preparers with the state. Still, non-credentialed tax preparers are usually not expected to have any certifications in the other forty states.

Hire a Tax Preparer

At (client name), we understand that not every taxpayer has the same filing requirements. Therefore, we have different tax professionals with varying levels of training, experience, and expertise on board. Our licensed tax professionals specialize in specific areas of taxation to assist you with any filing needs.

Looking for tax advice from a professional? Contact us now to have experts assist you in doing taxes. Get unlimited tax advice or have everything done for you from start to finish.