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Leslie Bonacum
Neil Allen

CCH Offers Insight On How To Pick A Tax Preparer

(RIVERWOODS, ILL., February 5, 2003) – Each year, millions of Americans turn to professional tax preparers for help with their annual returns as they seek to minimize their tax liability, without inadvertently crossing the IRS. According to the latest IRS estimates, in 2000, nearly 69 million returns were submitted by an accountant, tax attorney, enrolled agent, a retail tax service or other paid tax preparer. To help you pick a professional who’s right for you, CCH INCORPORATED (CCH), a leading provider of tax law information and software, offers these tips.

Step-by-Step Guidance

Step 1: Identify Several Candidates

- Go with know-how. It’s a good idea to look for a tax professional who has consistent experience in tax, especially since tax laws change frequently. Since 1995 alone, there have been almost 1,500 amendments to Internal Revenue Code sections. The increasing use of time-delayed effective dates for tax legislation means that new provisions can sneak into the tax code with little notice years after they were approved. Unless you’re tracking new tax developments every day, chances are you’re not aware of all of the changes that have taken effect.

- Ask your friends. Ask friends whose financial situations are similar to your own if they can recommend anyone to help you.

- Contact your state CPA, Legal or Enrolled Agent organizations. Many state organizations maintain computer databases of local accountants and other tax preparers and will provide free assistance in helping you select a tax professional in your area. Also, many of these organizations provide free assistance to low-income taxpayers who may not be able to afford tax preparation help. Finally, there are a number of Internet sites that provide listings and directories of accountants organized by locality.

Step 2: Ask the Right Questions

Once you have identified several candidates, take the time to discuss these important questions with them:

- What is the focus of your practice? Some tax professionals have specialties in areas such as real estate or small business. If you have specific concerns, make sure your tax professional is qualified to provide the special assistance you require by asking for references.

- Are you familiar with the laws of states in which I am subject to tax? If you have financial interests in states other than where you live, make sure your tax professional is familiar with those state laws or has access to research tools covering those states. For example, if you receive income from a partnership operating in another state or live in one state and work in another, selecting a tax professional with interstate knowledge is important.

- Does your experience meet my needs? You should have a general idea of your financial situation before searching for a tax professional. Are your taxes simple or complicated? Do you run a business from your home, have multi-state holdings or limited partnerships? The better you understand your financial needs, the better prepared you are to find someone to meet them.

- How do you bill your clients? Before you ask your tax professional to do anything, get a good idea of how he bills and the level of detail provided. Does he charge an hourly rate or a straight fee? How and when will you be billed? Will you be billed for research time if needed? Get the billing and payment terms in writing.

- Are there any additional fees? If you think, for example, you are interested in taking advantage of a refund anticipation loan, be sure to ask about associated fees. Most likely, there’s the fee to the tax preparation company to complete your tax forms, a separate fee to file your return electronically - - which is a requirement for loan program participation – and the bank loan fee itself. You may find you’re paying a hefty interest rate on your own refund.

- How do you characterize your professional style? Does she take an aggressive approach to minimize the tax burden even if it means incurring questions from the IRS or an audit? Or does she take a conservative path and risk paying a few extra dollars? Choose a tax professional whose approach closely matches your own philosophy.

- If I am audited, will you represent me? Ask your potential tax professional if he would represent you if the IRS questions your filing or decides to audit you. If so, ask if he has much experience with IRS audits. While some such experience is good, too much can be a warning sign.

- How do you keep current with the tax law? Does the preparer use current-year computer software to prepare your returns? Also, ask if she has access to tax research services, such as CCH, should the need for research arise.

- What do you need from me? Ask exactly what information is needed and in what form. Many professionals provide print or electronic "organizers" to help you sort your financial records. Some ask that all tax information be saved on a computer disk, which can be downloaded into tax return software. The more organized you are before you give your tax preparer your records, the better he is able to prepare your return in the shortest time (and the more money you can save in fees).

Step 3: Do a Final Check

- Make sure your CPA is licensed by the state CPA association. If you decide to hire a CPA, check with your state CPA Society to verify her license and to see if any complaints have been filed. If complaints have been filed, look elsewhere.

- Take a good look at your return before it is filed. Even if your return is prepared and signed by a paid professional, you are responsible for the accuracy of everything on there. Make sure the information on your return is accurate.

Some General Hints

- Keep accurate records all year. Or, at least organize your records before you give them to your tax professional. That means saving important receipts, stock earnings statements and salary records. By organizing your tax information before giving it to your tax professional, you’ll save the cost of having him organize it for you.

- Consider filing electronically. Electronic filing allows individuals or their tax professionals to send a return directly to the IRS through a computer modem at designated locations. Although a fee is often involved, the IRS has initiated a program to provide free electronic filing through participating software providers. The main benefit of e-filing is that you receive your refund much faster than if you file through the mail. Filing electronically may not be the best option if your refund is small because the fee may be larger than your refund.

- Get some mileage out of paying your taxes. You can use a credit card to pay taxes and in exchange take advantage of some benefits, such as matching airplane miles offered by credit card companies. Consider the benefits of charging your taxes, then quickly paying off the debt. You can use a credit card this year to pay your taxes when e-filing your return or using Telefile.

- Don’t wait until the last minute. The earlier you begin, the better. If you just can't file on time, the last day you can file for a four-month extension without penalty is April 15. Even if you file for an extension and you think you owe, you still have to pay by that date to avoid interest and penalties.

- Know your options. Certified public accountants are not the only help available for tax preparation; there are also tax attorneys, enrolled agents, certified financial planners and consumer retail tax preparation companies.


CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has served over four generations of business professionals and their clients. The CCH web site can be accessed at The CCH tax and accounting destination site can be accessed at

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