Briefly Noted

    Beyond the Software: How to Find the Right Tax Professional

    Tax law is not getting easier to understand and consumers are finding that software packages do not always ensure correct preparation or answer all their situations.

    So where do you start to find the right preparer? The National Association of Tax Professionals suggests that taxpayers base their decision on a number of considerations, including:

    • The complexity of your tax return.
    • Your occupation or industry: Does the preparer have specialized training in dealing with your tax situation (i.e., home-based day care providers, elder issues, real estate activities, etc.)?
    • Is future financial advice important? For example, do you want someone who will also help you out after tax season if the IRS questions something or audits your return? Is this an included service or will it be an additional charge? Is the preparer available year-round?
    • What is the fee structure, and does it make sense to you? How does the preparer charge—for instance, is it flat rate, per form or per house? Beware of preparers who advertise large refunds or those who base their fee on the percentage of the refund.
    • Do you feel that you can trust the person you select?
    • How many of their clients have been audited in the past 10 years?
    • How long has the preparer been in the tax business?
    • What type of credentials or designations do they maintain? Do they continually upgrade their knowledge by meeting continuing education requirements, and does the preparer belong to any professional organizations?
    • What do other clients say about the tax preparer? Referrals from friends and acquaintances are great, but references are important too.

    In addition, you should be familiar with the types of tax professionals. Tax professionals can have a variety of designations, each reflecting various areas of specialization. The most commonly known designations include:

    • Certified public accountants (CPAs): Have a college degree and have passed an exam required for certification. CPAs are especially qualified to maintain business records and financial statements. Many also prepare tax returns, and they are qualified to represent taxpayers in audits before the IRS.
    • Certified financial planners (CFPs): CFPs specialize in assessing individual needs and financial planning for the future. They handle investments and advise on “big-picture” planning to help individuals achieve their financial goals using the most advantageous means available.
    • Enrolled agents (EAs): EAs specialize in taxes. They are required to pass an extensive tax exam that is administered by the IRS, pass a stringent background check, and maintain sufficient continuing education credits in taxation to retain their certification. EAs, as well as CPAs and attorneys, are qualified to represent taxpayers in audits before the IRS.
    • Attorneys: Many attorneys specialize in tax law, and are qualified to represent taxpayers in audits before the IRS.
    • Accredited tax advisors (ATAs) and accredited tax preparers (ATPs) specialize in the preparation of personal and business returns. ATAs also offer comprehensive tax planning. Both require the completion of an exam in taxation.

    Many tax professionals do not carry a particular designation but are still highly qualified and reputable individuals. Finally, once you have enlisted the professional help of a tax preparer, it is critical that you check to see that he or she has signed your return before submitting it to the IRS. Paid preparers are required by the IRS to sign the completed return, because they have to stand behind the theory and reasonableness of everything on that return. Paid preparers who fail to sign returns they prepared are subject to a monetary penalty by the IRS.

    Scam Avoidance When Searching for Scholarships

    With scholarship dollars hard to come by, and parents anxious to get them, it isn’t surprising that scholarship fraud is on the rise. Here are some steps you can take to avoid becoming a victim:

    • Question All Fees: Generally, you should not have to pay an application fee to qualify for a college scholarship or an education loan. The Federal Trade Commission cautions that some legitimate companies may charge fees to search for scholarship information. If fees are required, find out in advance what they cover and if refunds are available. Get this information in writing before handing over any money, even a small amount. Be wary of programs that request fees and claim to “handle all the paperwork for you.”
    • Don’t Believe in “Guarantees”: Legitimate scholarship programs do not guarantee that anyone will qualify for any of their offerings. Also be wary if there is a lot of hype surrounding the scholarship, or if you are pressed to apply immediately to qualify.
    • Don’t Share Personal Information: A legitimate scholarship program should not require you to share your credit card number, bank account number, or other critical financial information.
    • Consult the Experts: Web sites such as and offer information you can use to learn more about securing the education funds you need without falling victim to a scholarship scam.

    Source: The National Foundation for Credit Counseling (NFCC) (