1.    What license do you have?

 

There are several types of licensed professionals who can prepare tax returns. 

The enrolled agent (EA) is authorized by the US Department of the Treasury. To become an EA, you need to pass an online exam and need an average of twenty-four hours of continuing education each year. No other knowledge is required. 

 

The certified public accountant (CPA) authorization is governed by each state’s board of accountancy. The road to earning the credential is not an easy one. Each state is different, but generally, a practitioner needs to have a minimum of a four-year degree and the equivalent of graduate school hours. An applicant must pass a four-part exam and work for two years in the related field before applying for certification. To maintain a CPA license, a professional is required to have an average of forty hours of continuing education per year. Besides, CPAs must adhere to a strict code of professional conduct.

 

Registered tax return preparers just need to register with IRS. There are no other requirements for this position.

 

Are there any disciplinary actions? Is the EA’s or CPA’s license in good standing? You can check EA credentials through the IRS site: https://www.irs.gov/tax-professionals/verify-the-status-of-an-enrolled-agent. For CPAs, you can check the individual state’s board of accountancy. For California, the site is http://www.dca.ca.gov/cba/consumers/lookup.shtml

 

Keep in mind that, although the CPA license is very difficult to obtain, some CPAs only specialize in accounting and auditing and have little experience working with taxes, while EAs focus primarily on taxes.
 

2.    What is your experience? What kind of taxes do you do?

 

If you are an individual or head of household, you should ask how many years of tax experience an accountant has, specifically, how many individual tax returns he or she prepares every year. Some tax preparers process over a thousand returns a year and do not spend much time on each return. Tax advisors who have over ten years of experience are a better choice, especially if the preparer has experience with larger CPA firm.    
 
If you are a business owner, focus on the preparer’s accounting background as well as his or her tax background. Does the preparer have an accounting degree? Does he or she have accounting experience with a CPA firm? What kind of experience? Does he or she have a specialty, such as S corporations or real estate investment? Dig into the details of what the preparer knows and doesn’t know. 
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3.    Who will be doing the work?

 

Ask if the EA or CPA advertised is the person doing work, and find out who the contact person will be. The person doing the actual preparation is the one you need to interview and feel comfortable with. Does he or she outsource bookkeeping work? How is the tax return review processed? 

 

4.    What is his/her availability?

 

Availability is one of the biggest reasons people get rid of their tax person. After cashing the tax season check, the preparer stops returning calls or e-mails and is nowhere to be found. Is it possible to find a tax preparer who’s reliable and reachable? Request a couple of references during the interview process, and ask what their experiences have been.

 

5.    What is the turnaround time? Are there any guarantees?

 

If you are not in favor of extensions, be sure to ask about turnaround times. 

 

6.    What is your tax philosophy, and what are your tax planning priorities?

 

Some tax preparers are more aggressive than others. Their philosophy should match yours. Discuss in detail their answers to questions such as, “How do you view the home office deduction?” and “How do you deduct travel and entertainment costs?” Do some research before you ask, so you know tax rules. You will get a sense of whether the preparer’s philosophy matches yours. 
 

7.     How does the preparer protect the client’s confidential information? 

 

All tax preparers are bound by federal and state laws, as well as professional ethical standards, to ensure the security and confidentiality of customer records. But not every preparer approaches privacy with the same seriousness. Find out the firm’s policy on disclosure of your confidential information.  

What about electronic data protection? Ask who and how each employee can access your confidential data and how is information transferred through the Web (e-mail, eFax, VPN). How are data released to a third party? What is the IT infrastructure of the company? You might not get all the information you need, but you might see the mindset of the firm that is holding your sensitive and confidential information.