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When selecting a tax preparer, be picky, precise
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Every so often, a politician will promise to tear up the tax code and create a tax return that's simple enough to fit on a postcard.

Until that glorious day, we're left to wade through hundreds of tax forms during tax season, from the most basic individual type (Form 1040EZ) to estate returns (Form 706) to first-time homebuyer credits (Form 886-H-FTBC) and on and on.

Although many filers with simple returns can do it on their own, others seek out an expert to help them sort through the paperwork. And if you're in that second group, finding a preparer can be a tricky exercise, but it doesn't have to be a hopeless one.

Who is a tax preparer?

You could pay your nephew or random neighbor $20 to fill out forms. But remember, you are ultimately responsible for the filing — and any errors it might contain.

In recent years, the Internal Revenue Service has tried to tighten regulation of third-party tax help, but a Jan. 18 federal court decision thwarted that, saying that the IRS can't regulate tax preparers as proposed in its Return Preparer Initiative.

The decision disappointed many tax professionals, including Mike Blackburn, an attorney, CPA and faculty supervisor of the University of Utah Low Income Taxpayer Clinic.

"Prior to the IRS case, anybody who had money to go to Costco to buy TurboTax called themselves a qualified tax preparer," Blackburn said. "Some of those people were totally unqualified and a lot of really bad tax returns were filed."

Blackburn said he supports more regulation of the industry.

"It's not to support market share; it's just to make sure that any (preparer) has a minimum level of competency," he said. "That improves the industry for all of us."

Make smart choices

Although the IRS plans to appeal the court decision, its website offers this advice: "If you choose to have someone other than yourself prepare your tax return, choose that preparer wisely."

Most paid tax preparers fall into three categories: tax attorneys, certified public accountants (CPAs) and enrolled agents. Most are individuals who pass an extensive three-part exam administered by the IRS, are required to take continuing education classes and are reviewed every three years.

As you weigh the options, here are a few tips for finding the paid tax preparer that's right for you:

Assess your needs • First, see if you can do it yourself. Often, though, a major life change means a more complicated tax picture, said Terry Marti, an enrolled agent in the Cottonwood Heights office of H&R Block.

"Anytime something changes in your life — you get married or have a child or retire or buy and sell property — that's when you may want some help," she said.

Do some homework • The law requires paid tax preparers to register with the IRS and obtain a preparer tax identification number (PTIN). This requirement is not affected by the recent court ruling.

Marti advises finding someone with a year-round presence because tax questions from the IRS can crop up anytime.

And if a sales pitch sounds too good to be true, it probably is, said Gail Anger, a longtime CPA with Professional Business Advisors in Bountiful.

"If someone guarantees a refund, that's a dead-set thing to be wary of," he said.

Using a licensed professional, such as an attorney or CPA, can offer an added layer of security, said Michelle McGaughey, CEO of the Utah Association of Certified Public Accountants. She said licensed professionals are held to a higher set of standards, which helps protect consumers.

"A dozen times a year, I'll talk to someone who says they went to a non-accountant and their taxes were botched and asked, 'What can I do?' If you hire a CPA and they blow it, you can go to state board of accountancy, which has authority to admonish or sanction that CPA," McGaughey said.

To check on a CPA's credentials, visit http://www.uacpa.org or call (801) 466-8022.

To check out an attorney, contact the Utah State Bar at (801) 533-9077 or email info@utahbar.org.

To verify a preparer's PTIN with the IRS, send an email to epp@irs.gov, or call (313) 234-1280. Have your full name and address ready to share.

Look at your budget • Many tax preparers charge by the form, so a simple filing can be as low as $50. But according to a recent survey by the National Society of Accountants, the national average cost for an itemized Form 1040 with Schedule A and a state tax return was $246.

Ask around • Finally, Anger, the CPA who's been in private practice for the past 23 years, recommends asking your friends, neighbors and business associates who does their taxes.

"Most of our clients are referrals," he said. "We get a lot of clientele by word of mouth. Ask the people you know who they work with and what works."

jnpearce@sltrib.com

Twitter: @jnpearce —

Finding the right preparer

To check on a CPA's credentials, visit http://www.uacpa.org or call (801) 466-8022.

To check out an attorney, contact the Utah State Bar at (801) 533-9077 or email info@utahbar.org.

To verify a preparer's tax identification number with the IRS, send an email to epp@irs.gov, or call (313) 234-1280. Have your full name and address ready to share.

Tax time • Homework can help you head off costly mistakes.
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