Four Things Your Tax Preparer Might Not Tell You

Oh, no! Tax time is almost here. If your tax return is a simple one, you may be able to file the return yourself. However, if your situation is more complicated and you are not confident preparing your return, seeking a qualified professional’s help is probably your best move.

Our company, SFS Tax Problem Solutions, specializes in helping people resolve their back-tax problems such as filing years of unfiled returns, settling your back taxes with the IRS, or negotiating favorable payment plans that are often unknown to the average taxpayer.

There are millions of people getting threatening letters from the IRS every year, and we can help. But how did these mostly honest people end up in trouble in the first place? 

When you hire a professional to do your taxes, you assume that the person doing your taxes is an expert, with years of training, the right licenses and certifications. And the expertise needed to do the job and do it right. In many cases, blind trust should not be exercised. In today’s world, you can no longer simply select any tax preparer you find on Google.

The fact that the person you hire is allowed to do taxes is no guarantee of quality or qualifications.

Note: The COVID-19 tax relief, forgivable loan programs, and stimulus checks all have different and unforeseen tax consequences that you’ll need to consider. If you have any tax trouble or owe more than $10k to the IRS or state but can’t pay in full, contact our firm today. We help people find tax relief. Contact us today for help,

Here are four things your tax preparer may not tell you, and how you could be subject to an unwanted tax bill at the end of the year.
1. A Lot of Tax Preparers Have No Tax-Specific Training or Expertise

The fact that an individual, or an employee of a tax preparation company, is allowed to complete tax returns means almost nothing. The tax preparer is not required to have tax-specific training or expertise to obtain the paid preparer tax identification number (PTIN) they need. The only requirement for getting the required PTIN is completing a simple form – one that takes about 15 minutes to fill out.

Before you hire any tax professional, you should ask about their specific training, qualifications, and expertise. Find out how long they have been doing taxes, ask about audits they have been involved in, and share your personal tax situation. Above all, do not hire anyone until you feel comfortable with their ability to handle your tax return correctly.

An Enrolled Agent or CPA licensed by the IRS is your best choice when looking for qualified tax professionals. We hear horror stories from our tax relief clients all the time where the tax preparer messed up something on their tax return or didn’t give the client the right tax strategy, so they ended up with a burdensome tax bill. It must be stated that a license does not mean quality. As there are good unlicensed preparers, there are also bad licensed ones—caveat emptor.

2. They Won’t Be Preparing Your Return, Who Will Be?

It is an open secret in the world of tax preparers that returns are prepared in stages. That means the firm owner or the most experienced professional will probably not be the one who initiates your return.

Instead, a junior associate will likely enter your income information and other relevant data, identify potential deductions, tax credits, and give your return a quick review. Once that is done, a senior advisor or tax preparer should look at the return, verify that it is correct and sign off on it.

This can often cause a communication breakdown causing issues that could land you with considerable tax debt. Most taxpayers blindly trust their tax pro and don’t thoroughly review the deductions and tax return draft.

If you are not comfortable with this multi-step process, it is essential to share your concerns with your preparer. The sheer number of tax returns some firms handle during a busy season makes this multi-step process necessary. Still, it is essential to know how things work and what you can do to ensure the right level of attention. 

Here at SFS Tax, all returns are prepared by Jeffrey Schneider, EA, CTRS. You can rest assured that you are getting all of the deductions legally allowed by the law.

It’s also vital to review the return in full detail to avoid unwanted surprises, audits, or unforeseen tax debt.

3. I May Not Research Unusual Deductions and Tax Breaks

Professional tax preparers tend to be a pretty conservative bunch, which is good news when it comes to your chances of being audited. It can be bad news, however, for your overall tax bill.

Your tax preparer will no doubt apply the most common deductions and tax credits to your return, things like the deduction for educational expenses and health care costs and the earned income and retirement tax credits. What they may not do is research more unusual tax credits and deductions, even if they could potentially save you money.

If these special circumstances apply to your return, you should discuss the situation with your tax preparer and look for ways to include them with your filing. You may need to pay an extra research fee or renegotiate the cost of preparing and filing your return. The tax savings could be worth the additional cost.

4. EA or CPA Does Not Mean Tax Relief Pro 

When clients get into tax trouble or get behind on paying their tax debt, they often turn to the very same tax pro that prepared the return. Unfortunately, most credentialed professionals are not skilled in the intricacies of tax relief.

Tax relief means – they know all the available programs the IRS has to settle your tax debt. Or give you favorable payment terms that don’t drown you in penalties and interests. Even if they think they know, they often aren’t experienced in negotiating with the IRS on your behalf to get you the best possible outcome.

It is easy to assume that every tax preparer is a tax relief expert. After all, the CPA or EA designation is one of the most difficult professional statuses to obtain. Only the most qualified people get to put the letters CPA or EA on their business cards.

Even so, not all CPAs or Enrolled Agents are tax relief experts, and many do not know any more about settling your tax debt than you do. Some CPA firms prepare tax returns for their clients as a courtesy, but their staffs may not have specific training or expertise in tax law or tax relief negotiations.

If you have back tax debt, we highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and tax resolution through our firm can save you money and time in the long run. You might also be eligible for other IRS relief programs or get your penalties reduced or removed. Reach out to our firm today for a consultation,