Thursday, January 15, 2009


An anonymous reader has made a good point in a comment to my posting “Tradition”.

After agreeing with my assessment of CPAs and Henry and Richard (“You have me convinced that going to H+R is a bad idea. . . I used them twice and both time was underwhelmed with their ability to advice me on lowering my tax liability”) the reader correctly points out –

What your post (good though it was) did not deliver was any advice on how to actually find someone who could be relied upon to help me pay the lowest of tax each year without risking imprisonment.”

So after spending two posts telling you how not to choose a tax preparer here is my advice on how to find a preparer.

As with any other professional person – doctor, dentist, stockbroker, insurance broker – the best resource for finding a good tax pro is personal referral.

While you certainly should not solicit or accept actual tax advice from family, friends or co-workers, you can ask your family members and friends who they use, how long they have been going, how much they pay, and about their level of satisfaction with the service.

Your co-workers are also a good source, as you want to find someone who is experienced in preparing the 1040s of individuals in the same trade or profession as you. If you are a police officer, fire fighter, teacher, nurse, salesman, actor, writer, etc look for a preparer who is experienced with the returns of those in your field and familiar with the special deductions available to your particular profession.

If this does not yield a good result you should look for an EA (although having that designation is not a requirement for a good tax pro) and/or a member of one of the tax professsional associations like the National Association of Tax Professionals. You can be sure an EA is knowledgeable in the Tax Code and current on recent changes. NATP, and its many state chapters, offer members superior continuing education opportunities on federal and state income taxes, informative weekly, monthly and quarterly tax publications, and the availability of an excellent Research Department.

You can look for an EA in your area at the website of the National Association of Enrolled Agents. Click on “Find An Enrolled Agent” under “For Taxpayers” in the left margin. The National Association of Tax Professionals provides a directory of members at

A word of advice – while you do want to get some kind of idea as to what your returns will cost, do not make your very first question to a potential preparer, “How Much Do You Charge?”. While an important criteria, the cost of the return is not necessarily as important as the competence, knowledge, experience, ethics of and qualify of service provided by the preparer.

You do want to make sure the cost is “appropriate” for the service. You don’t want to pay gourmet restaurant prices for fast food service (as you do with H+R and others of that ilk) – or pay $400 for a return that should only cost $150 - but is inflated due to the excessive overhead costs of the preparing firm (you know what I mean). Similarly you do not want to choose a preparer only because he gives you the lowest “quote”.

An honest preparer will not be able to tell you the exact cost of your returns without actually knowing just what is involved. But he can give you a general idea of the range and provide you with a fee schedule or explain how his fees are determined (i.e. hourly rate, per Form/Schedule fee, or combination thereof). Obviously the more complicated the return the higher the fee – and the more organized and knowledgeable you are the lower the fee.

I have found over the years that whenever a potential client tells me “Oh, it’s a simple return” it never is!

You may also want to consider my fellow tax bloggers who practice in your area. While I do not use TWTP to solicit new business, many bloggers do. By reading a selection of their posts you can get an idea of their competence, experience and ethics.

So now you know both how not to and how to go about choosing a qualified, competent and ethical tax professional to help you navigate the maze that is the Tax Code and make sure you pay the absolute least amount of federal and state income tax possible.

Any more questions?


1 comment:

Anonymous said...

Just a quick note:

I have a list of things a person can do as well along with a list of questions one should ask a perspective tax preparer