If you’re facing unpaid taxes from this past April, or perhaps you haven’t filed in years and are facing failure-to-file and failure-to-pay penalties for your federal taxes, you probably realize you need help. It’s scary facing tax debt, collections letters, and threats from the IRS. It’s even scarier facing collections tactics alone.
But you might be confused about the type of tax professional you need. Just like doctors and lawyers, tax professionals have different areas of specialty, each requiring different degrees and certifications.
You wouldn’t go to a criminal attorney if you were buying a house; you’d need a real estate attorney. Likewise, you wouldn’t go to a cardiologist if you broke your arm.
But when it comes to tax professionals, the differences in their skills or specialties may not be as obvious. There’s substantial overlap in the duties they can perform, but, in many cases, one type of tax professional may be better than another. Whether you’re facing tax debt, unfiled taxes, charges of tax evasion, or an IRS audit, knowing the best professional to help you is half the battle.
Types of Tax Professionals
Tax professionals may have different specialties and areas of expertise, as well as different degrees or certifications. Our breakdown can help you choose the right tax expert to meet your needs.
Tax relief companies often hire many different types of tax professionals to serve their client base. You can count on Alleviate Tax to connect you to the right experts to provide the tax advice and guidance you need.
Tax Preparer
A tax preparer is a professional who has a special ID number showing they are qualified to prepare tax returns on behalf of clients. A tax preparer should have an active preparer tax identification number (PTIN) authorizing them to prepare tax returns.
If you are up-to-date on your tax filings and want to stay that way, potentially maximizing your tax refund amount or reducing your tax liability, you may want to rely on a tax preparer.
Just because a tax preparer hasn’t earned their public accounting certification or passed the bar to become a tax attorney doesn’t mean they aren’t good at what they do. Tax preparers, by law, are limited to preparing taxes for their clients and representing their client before the IRS under very specific circumstances.
IRS Enrolled Agent
An IRS enrolled agent will bear the designation “EA” after their name. In spite of the title, an IRS enrolled agent doesn’t work for the IRS, but they are licensed by the agent. Enrolled agents must pass a comprehensive exam covering tax planning, tax return preparation for individuals and businesses, and IRS representation during an audit.
Enrolled agents must also complete 72 hours of continuing education annually, according to the IRS website.
Certified Public Accountant
A certified public accountant, or CPA, may specialize in tax preparation, but they may not. Just because a professional holds a CPA designation doesn’t mean they are the best person to help you file your taxes. Some CPAs work as CFOs, controllers, bookkeepers, or other jobs related to finance.
All CPAs must pass the CPA exam to be licensed by their state board of accountancy. They must also meet experience requirements, ethical requirements, and continuing education over the years to maintain their certification.
If you are a small business owner looking to handle your daily, weekly, or monthly accounting needs and also help with quarterly or annual tax filings, you might want to rely on the expertise of a CPA who specializes in small business tax accounting.
Most individuals and couples, however, may not need the expertise of a CPA for their personal income tax filing needs.
Tax Attorney
If you are facing unpaid tax debt and possible charges of tax evasion, your case may need the services of a tax attorney. If you filed an appeal and need representation in tax court, you may also want the knowledge and expertise of a tax attorney. Likewise, a tax attorney may be the best person to assist in the case of an IRS audit, depending on your personal situation.
Tax attorneys have extensive training in tax law, and also pass the bar exam for the state in which they practice.
Alleviate Tax has California tax attorneys on our team to provide our clients the services they need if their tax troubles extend beyond the expertise of an accountant or tax preparer.
Choosing the Right Tax Professional
When you’re choosing a tax professional, it’s important to pick the right expert for the job. A tax preparer can help you reduce your tax liability as an individual taxpayer or a business owner. An IRS enrolled agent is a tax preparer who has passed special licensing exams, highlighting their expertise in tax preparation. An EA may be able to help you with tax debt by negotiating with the IRS on your behalf.
If you’re a small business owner, a CPA can help you with tasks like managing your books and track your quarterly estimated taxes. High-net worth individuals with investments may also hire a CPA to help them track income and expenses.
If you’re seeking a CPA to help you in case of an audit, be sure the individual or firm you choose has expertise in tax accounting, specifically. Not all CPAs are experts in tax matters.
Finally, if you are facing charges of tax evasion, you’ll want a tax attorney by your side to represent you in court. Tax attorneys, along with enrolled agents and CPAs, can also provide representation in tax court if you’ve filed an appeal. You have the option to represent yourself, but a tax lawyer with knowledge and experience is more likely to know how to present your case to achieve a favorable outcome.
What Else to Look for in Tax Professionals
In addition to finding the expert most well-suited for the job, make sure the tax company you work with has:
- A strong reputation of customer satisfaction
- High marks with the Better Business Bureau
- Positive reviews
If you’re looking for someone to negotiate tax debt relief on your behalf, it’s best to find a company that offers:
- A money-back guarantee
- Seasoned professionals who can handle all your tax needs
- Free consultation
Alleviate Tax is a trusted company that was a finalist in the BBB Torch Award for Ethics, a top 3 ranked U.S. business by Best Company, and one of the top places to work two years running by the Orange County Register in our home state of California.
We have CPAs, EAs, and California tax attorneys on staff to assist you the tax debt relief you deserve.
FAQs
Is a tax professional the same as a CPA?
A Certified Public Accountant is a licensed finance professional who has passed certification exams, has work experience, and commits to continuing education. Some CPAs are experts in tax accounting, but not all. CPAs can also work as CFOs, controllers, and bookkeepers. Not every tax professional is a CPA.
What are some examples of tax professionals?
Tax professionals include tax preparers, IRS enrolled agents, CPAs, and tax attorneys.
Who is the best person to file your taxes with?
If you are looking to maximize your deductions and ensure your taxes are filed correctly, you might want to hire an IRS enrolled agent or a CPA specializing in tax accounting. These professionals have passed extensive licensing exams and can also represent you during an IRS audit, if necessary.
Why would someone go to a tax professional?
It’s a good idea to file your taxes with a tax professional if you want to ensure they are filed correctly and that you are claiming all the deductions you deserve. You may also need a tax professional to negotiate tax debt relief, represent you or your business in an audit, or represent you in tax court during an appeal.
