Staffing Shortage in the Accounting Industry
If you’re looking for a tax preparer for the upcoming season, it’s advisable to start your search early due to a staffing shortage in the accounting industry. This is especially true if you require someone with specialized expertise like employee retention tax credits or cryptocurrency taxes. However, it’s crucial to be cautious and thorough when vetting potential tax preparers.
Low Barrier to Join the Profession
The Internal Revenue Service (IRS) recently announced plans to crack down on “unscrupulous” tax preparers. Currently, the requirements to join the profession are minimal, with individuals only needing to register for a Preparer Tax Identification Number (PTIN) through the IRS. This lack of minimum competency standards for return preparers has been identified as a significant problem by National Taxpayer Advocate Erin Collins.
Finding a Mutual ‘Good Fit’
The first step in finding the right tax preparer is understanding your specific needs. The scope of tax arrangements differs between W-2 employees and small business owners. It’s also important to distinguish between simply preparing a tax return and receiving ongoing planning throughout the year.
To begin your search, ask for referrals from family, friends, or colleagues, and conduct interviews with each candidate. A good advisor will prioritize developing an ongoing relationship rather than treating it as a transactional arrangement.
Checking for Tax Credentials
While anyone with a PTIN can legally prepare federal tax returns, their levels of education, experience, and expertise may vary. Attorneys, certified public accountants (CPAs), and enrolled agents have unlimited representation rights before the IRS and must meet continuing education and ethics requirements.
“At a minimum, they should be participating in the IRS’ annual filing season program.”
– Josh Youngblood, Owner of The Youngblood Group
To verify a CPA’s credentials, you can search state boards, and for an enrolled agent, you can email the IRS. However, unlicensed tax professionals who participate in the IRS’ annual filing season program can also be competent preparers.
Hot Take: Ensuring Quality in Tax Preparers
With the staffing shortage in the accounting industry and the low barrier to becoming a tax preparer, it’s crucial to take precautions when choosing a professional. Start your search early, prioritize finding a mutual “good fit,” and thoroughly vet candidates for their credentials and experience. Look for tax preparers with unlimited representation rights before the IRS, such as attorneys, CPAs, and enrolled agents. Additionally, consider those who participate in the IRS’ annual filing season program as it demonstrates their commitment to continuing education and limited IRS representation rights. By being diligent in your selection process, you can ensure that your tax preparation needs are met by a qualified and trustworthy professional.
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