J.K. Lasser's Small Business Taxes 2022

CHAPTER 33Working with CPAs and Other Tax Professionals

1. Types of Tax Professionals
2. Finding a Tax Professional
3. Tips for Selecting a Tax Professional

According to the NFIB, 93% of small businesses use an external tax practitioner to prepare their returns; only 7% do it in-house (by owners or staff). And given the numerous changes to tax rules in recent years, the percentage of owners turning to professionals is likely to increase. There are several compelling reasons for this: the complexity of tax rules; continual changes in tax rules; the variety of tax returns that must filed for income, employment, and excise taxes; and the time it takes to address tax responsibilities. Due to the sweeping changes in the tax law, it's likely that even more small businesses will use tax professionals for return preparation and advice.

If you work with a tax pro or are thinking of doing so, be sure you select the appropriate professional for your situation. This chapter explains what to look for. It also provides important tips in finding and vetting a tax professional.

All paid tax preparers are required to have a Professional Tax Identification Number (PTIN), which must be renewed annually.

Types of Tax Professionals

There are various types of tax professionals. They have different levels of education, skills, and continuing education requirements. They also have different representation rights in dealing with the IRS.

Attorneys

Attorneys are licensed by state courts, the District ...