The Tax Preparation Process
Updated: Nov 3
The tax preparation process can be confusing and intimidating. It's important to find a tax representative who understands your needs, but how do you know where to start? Tax preparation is the process in which individuals and businesses calculate the tax owed to a federal, state or local government. They then file a tax return with the IRS. Individual taxpayers and businesses have to choices to make: prepare their taxes by themselves or to get the help from a tax professional. Tax professionals will always have more understanding of tax-matters than your average taxpayer. The tax professional will more often determine more costs and conditions that qualify them for tax breaks, credits, and other financial benefits.
There are three types of representatives: CPAs, Enrolled Agents (EAs), and Tax Attorneys. They all have “unlimited representation rights” and different roles to play, but all essentially will work towards the benefit of the taxpayer who requested the service.
Enrolled agents must pass a three-part Special Enrollment Examination to be licensed by the IRS. This is a thorough exam that demands them to demonstrate competency in federal tax planning, individual and company tax return preparation, and representation. Every three years, they must partake in 72 hours of continuing education.
Certified Public Accountant
Certified Public Accounts, or CPAs, have passed the Uniform CPA Examination. They are licensed by state boards of accountancy, the District of Columbia, and U.S. territories. In addition CPAs must have finished a study in accounting at a college or university and have satisfied experience and good character standards specified by their respective boards of accountancy. In addition, in order to keep their CPA license current, CPAs must follow certain ethical guidelines and complete certain levels of continuing education. CPAs can provide a variety of services; some specialize in tax preparation and planning.
Attorneys are licensed state courts, the District of Columbia or their designees. They have a law degree and have passed the bar test. Attorneys are required to maintain ongoing education and professional conduct requirements. Attorneys may provide a variety of services. Tax attorneys are experts in tax preparation and planning.
Your tax practitioner is your best bet to handle any issues with your taxes including your back taxes or unfiled years. As of these recent years, the IRS has offered a solution to taxpayers who have great difficulty in paying their taxes. There's a relief program that consolidates many major relief programs into a one-size-fits-all assistance program; The IRS Fresh Start Program. Our clients are referred to our Fresh Start Program in order to avoid bankruptcy, acquire debt relief, and settle their debts in a quick manner. Let us give you a helping hand today!
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