Research to find right tax preparer

NEW YORK --- American workers have started receiving W-2 tax forms from their employers, which means the April 15 income tax-filing deadline isn't that far away. Although many people still do their own taxes, a majority seeks professional help to deal with the increasingly complex tax code.


Taxpayers who have experienced a significant lifestyle change in the past year -- the birth of a child, the death of a spouse, the loss of a job -- are among those who could benefit from the help of an accountant, enrolled agent or other tax professional in preparing their returns this year, experts say.

"There are some people who do their own taxes year after year, and that's just fine," said Eric Tyson, a financial consultant and co-author of Taxes 2008 for Dummies . "But a significant change in your personal situation can be a good reason to think about hiring an adviser."

One of the best ways to find a good tax preparer is to ask family members and friends for recommendations, said Suzanne Schmitt, a senior tax analyst for Thomson Tax & Accounting.

"You want to ask people you trust, especially people who are in similar circumstances," she said.

That is, if you just bought a condominium, find someone who has used a tax preparer who is knowledgeable about real estate transactions; or if you've got a home-based business, you want a preparer who can handle that kind of return.

Tax preparers have a variety of titles.

Many tax preparers are certified public accountants, who have graduated from accounting programs at colleges or universities and have passed a uniform exam. The American Institute of Certified Public Accountants maintains a Web site at

Some attorneys specialize in tax matters and also will complete clients' returns.

Another group of preparers are the enrolled agents, who are specially trained and licensed to practice before the IRS. Their trade association, the National Association of Enrolled Agents, has a site at with membership lists.

There also are trained professionals working at the major commercial tax-preparation chains such as Jackson Hewitt Tax Service Inc. and H&R Block Inc.

Ms. Schmitt said consumers should avoid dealing with tax preparers who make outrageous promises.

"If someone hasn't even looked at your records but promises a big refund, that's someone to avoid," she said.

Ms. Schmitt added that another red flag is someone who wants to be paid a percentage of whatever refund they get a consumer. Mr. Tyson said that consumers should ask prospective preparers what the focus of their practice is --- that is, do they specialize in individual returns or small business returns? Consumers also should ask how preparers are compensated.