The key is to only use a tax professional. Stay away from the big tax stores/ houses. Keep in mind, if you are audited by the IRS, only a tax professional can represent you. Tax professionals are a Certified Public Accountant or an Enrolled Agent.
It is best to establish a relationship with your tax professional before tax time. Nevertheless, choose a small firm and develop a good working relationship with your tax professional. Whoever you get your tax advice from you are legally responsible for all information on your tax forms. Make sure you have a confident professional that is honest and trustworthy.
A Certified Public Accountants(CPA) must have an extensive educational background in accounting, successfully pass the CPA examination, and maintain continuing education. CPAs are experts in all aspects of accounting, bookkeeping,and finance.
An Enrolled Agents(EA) must pass a 2-day comprehensive examination by the IRS or be a former IRS employee with 5-years working experience. EAs are experts in taxes only. EAs are usually members of the National Association of Enrolled Agents.
In the past, I have used a CPA; this tax season I will hire an EA. EAs are experts in their field, can represent my interest before the IRS, and they cost less than a CPA.
What type of Professional will you use and why?