Types of Tax Professionals
There are four basic kinds of tax professionals. These include tax preparers, Certified Public Accountants (CPAs), Enrolled Agents (EAs), and tax attorneys. Each type of tax professional is trained to deal with specific kinds of issues.
A tax preparer is typically a seasonal worker who does the bulk of his or her work during the annual tax season. These individuals are up-to-date on current IRS tax guidelines and regulations for preparing individual and small business tax returns.
A CPA is a college graduate who has received a degree in accounting and passed a state licensing exam to receive their accreditation. CPAs must submit to stringent requirements to get and keep their license.
An Enrolled Agent is a tax professional who has passed a multi-day, detailed exam that is administered directly by the Internal Revenue Service. These professionals are extremely educated in the U.S. tax code and can even represent taxpayers during an audit.
A tax attorney is both an accountant and a lawyer. Because of their extensive legal and financial background, tax lawyers are qualified to both represent taxpayers during an audit and to argue their case in court.
How to Know When to Hire Each One
So, how can you tell what kind of tax expert you need to hire? It depends greatly on your specific tax issue. If you have questions about filing your upcoming tax return, then a tax preparer may be the ideal professional to help you. However, if your situation involves other accounting issues that arise during the year, then you might benefit from the extensive knowledge of a CPA.
If you're currently facing an IRS audit, an Enrolled Agent can help you by representing you during the hearing. On the other hand, if you are facing charges of tax fraud or evasion in a court, then you'll need the highly specialized services of a tax attorney.
Now that you know more about how each kind of tax professional can be of help to you, you'll be able to decide which expert to hire and when.
