Finance Tax Time

The difference between an Enrolled Agent (EA) and an Unenrolled Practitioners is about $150.00 per hour with strict limitations on the part of the Unenrolled practitioners.

Attorneys, CPAs and Enrolled Agents can ‘Practice Before the IRS’. This means they are qualified to represent a particular taxpayer. They can sign claims for refunds, receive refund checks, sign consents to extend the statutory period for assessment or collection of tax, sign closing agreements regarding a tax liability and sign waivers of restriction on assessment or collection of a tax deficiency.

An Unenrolled Practitioner may represent the taxpayer only concerning the tax liability for the year or period covered by the return that he or she prepared. An Unenrolled Practitioner is not permitted to represent taxpayers before the appeals, Collection, or any other function of the IRS.

So many consumers wonder, what is the roll of an Unenrolled Tax Practitioner when it comes to tax problems? Especially since the Unenrolled Tax Accountant is usually about $100 per hour less then the EA and $150 to $200 less then the CPA and Attorney (give or take a few dollars)

The functions of each of these groups of people is clearly defined in what Forms they are allowed to use with IRS. It is fair to say that if the IRS Notice says “audit” then a CPA, Tax Attorney or Enrolled Agent is the best solution. The Power of Attorney Form 2848 is necessary in order to communicate with IRS on the client’s behalf.

However, if IRS sends you a Notice saying you have NOT filed your taxes for certain tax years, then your choice of tax professionals can include an Unenrolled Tax Accountant or Practitioner. The Tax Accountant can use a Form 8821 - This Form authorizes the IRS to discuss and provide specific confidential tax return information to your Tax person to resolve your tax issues.

The bottom line and an easy way to figure out who can do what; is to remember that a Power of Attorney (Form 2848) allows your Tax professional to “speak” for you, meaning they can Practice before the IRS.

On the other hand, a Form 8821, (used by Unenrolled Tax professionals) is an authorization form and allows IRS to provide information to your tax professional that can eliminate problems and resolve your tax issue in a timely manner, however, they cannot “speak” for you. An Unenrolled Tax professional can relay information back to the taxpayer and can give out necessary information to make things right with IRS.

ALL authorized Tax practitioners are covered under the Confidentiality Privilege. The confidentiality protection for certain communications between a taxpayer and an attorney (privileged communications) applies to similar communications between a taxpayer.

Share This

Filed under: Finance by admin
No Comments »

Nothing leads to more gnashing of teeth than the thought of preparing your own taxes. Fortunately, there are people out there that do it for a living.

Here Are My Receipts

If the thought of preparing your own taxes makes you queasy, don’t worry. Preparing your taxes is a job that can be shipped out to others. These individuals, known loosely as tax preparers, prepare tax returns year around. Here’s a breakdown of the different types of preparers.

Basic preparers are the least trained, but the cheapest to hire. They tend to be part time workers who are individually employed our work at large out fits like the one with the letters H and R in its name. If you have a simple tax situation, like basic W2 wages and no homeownership, this can be a good choice.

Enrolled agents are a step up from basic preparers. These individuals are licensed by the IRS and must take continuing education courses to maintain their license. That being said, they are not formally educated in the field of finance or tax. Enrolled agents are typically more competent than basic preparers, but much less so than a CPA. If you have a tax situation requiring a basic 1040 filing with one or two schedules, a good enrolled agent should be able to take care of it. If you are looking for more sophisticated tax planning to cut your tax bill, a CPA is probably your best choice.

A CPA [Certified Public Accountant] is a highly trained and licensed individual. Passing the boards to become a CPA is extremely difficult. Once a person becomes a CPA, they also are required to pursue up to 40 hours of continuing education. The downside of using a CPA, of course, is the higher competency translates to higher costs. Still, you get what you pay for, so a CPA may be the answer if you are doing well financially and are looking for guidance on tax planning.

Tax attorneys are a beast unto themselves. If you’re bringing in the big bucks, tax attorneys can save you a bundle with sophisticated plans. Tax attorneys are also the people to see if the IRS decides to have a go at you. While CPAs can handle the tax issues raised by the IRS, CPAs tend to know next to nothing about evidentiary law. A good tax attorney will be able to throttle the IRS on legal issues.

So, who should you use to prepare your taxes? It really depends on what you are looking for and your finances. Generally, the more complex your finances, the more competency you should look for. If you have the money, go with a CPA. A good one should be able to save you far more than their fee.

Richard A. Chapo is with http://www.businesstaxrecovery.com - recovery of business taxes through tax help and tax relief. Visit http://www.businesstaxrecovery.com/articles to read more business tax articles.

Share This

Filed under: Finance by admin
No Comments »

Tax preparation and tax preparer selection is not all that difficult, but there are those who make it difficult by not adhering to a few simple rules. It begins with choosing your tax preparer carefully and carefully communicating with that
preparer once he or she is chosen. It begins with choosing your preparer carefully.

Here are questions you can ask your tax preparer before you get started.

1. What are your qualifications?

A CPA or Enrolled agent are the best qualified to do taxes. Both of these designations regularly take classes and take an exam for their designations. A CPA or certified public accountant is the
highest qualified.

2. Would you be willing to lie on my return?

If your preparer says yes, run as fast as you can. This can get both of you in trouble so why would he/or she be willing to lie. Perhaps your preparer is not licensed. Licensed preparers can loose their designation if they are caught lying on a return.

3. How is your information protected in their office?

The computer and back up files should be secure after hours. All paper files should be secured in locked cabinets. Identity theft is on the rise.

4. What are your cost?

Agree on a tax preparation before you hand over your information, so there are no surprises.

5. Can I pay you extra to re-check my return against documents I have given you?

Ask your preparer to re-check your return. If you have the ability to check your return against your documents that is fine. But, you absolutely should check for the small things: correct spelling of your name, correct social security number, correct occupation, correct income, and any other minor items, which could turn major if entered incorrectly.

6. How Long Will It Take?

It is your responsibility to organize your tax information and submit it to your tax preparer early. It is your tax preparers responsibility to get the information back to you in a timely manner, so you can file your taxes well before the tax deadline.

Lois Center-Shabazz is the founder of the personal finance website, http://www.MsFinancialSavvy.com and author of the 3-time award-winning personal finance book, Let’s Get Financial Savvy! ISBN #0971979502.

Share This

Filed under: Finance-Tax Info by admin
No Comments »