Choosing the Right Tax Representative

The IRS recently provided a special tax tip: “Who Can Represent You Before the IRS?”  The tip shared new rules and important information about who is authorized to help you not only with your tax return but with more challenging tax issues like audits, collection problems, or appeals.  Here’s the gist of what you need to know….

1. Not all tax professionals are created equal when it comes to representing you before the IRS.  First, make sure your tax practitioner has an active IRS Preparer Tax Identification Number (PTIN), meaning he/she is authorized by the IRS to prepare your federal tax return(s).  Second, make sure you know whether your tax preparer has unlimited representation rights or limited representation rights and what that entails.
2. A tax professional has unlimited representation rights if they are an Enrolled Agent, Certified Public Accountant, or an attorney. This means they can represent you on any tax matter, whether or not they helped you prepare your tax return.
3. Whether or not a tax professional has limited representation rights depends on the tax return in question. If tax professionals don’t have the credentials required for unlimited representation, they can provide limited representation “if, and only if, they prepared and signed [your] return.”  In addition, they must be participants in the Annual Filing Season Program.
4. A tax professional with limited representation rights can’t help with everything and everyone. Limited representation rights only allow your tax return preparer (who meets the qualifications previously listed) to represent you “before the IRS revenue agents, customer service representatives, and similar IRS employees.”  Also, they cannot help with collections or appeals.

5. Most states do not require some sort of testing and ongoing education for tax preparers. And tax errors can bring expensive consequences like delays in processing your return, delays in receiving a refund, additional taxes, and penalties.

6. Bonus tip! Want to know if your tax preparer has what it takes?  Look them up in the IRS’s Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.  When you choose a tax preparer to help you with your tax return, consider finding someone who can represent you for all tax matters with the IRS so you know you’ve got the right support if a problem should arise. Also, the IRS reminds taxpayers to choose a tax professional carefully.

Still have questions?  Want to find a tax preparer you can rely on?  Talk to your Money Coach about working with one of our tax specialists or getting a referral to a CPA firm provided to members at a discounted price.  Our tax team includes Money Coaches with credentials like Certified Public Accountant and Enrolled Agent.  Call 888-724-2326 for more information.

Information provided in this handout is for informational purposes only and is not intended to offer specific personalized investment, financial planning, legal, tax or accounting advice. We recommend that you consult an attorney, tax advisor or accountant regarding your unique financial goals and circumstances

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