If you haven't done this already, it's time to select a tax preparer for your 2011 business and personal taxes. The IRS has some advice on selecting and working with a tax preparer, and I wanted to point out a couple of items from this article.
IRS Requires Tax Preparers to Register
The IRS has new requirements that all paid tax preparers must register with the IRS, and all tax returns prepared by a paid individual must include that tax preparer ID (PTIN). While that registration doesn't affect you directly, you should find out if your tax return preparer has not registered, since the IRS won't accept your return if the PTIN is not included.
Investigate Tax Preparers
The IRS says you should "Investigate whether the preparer has any questionable history with the Better Business Bureau, the state's board of accountancy for CPAs, the state's bar association for attorneys or the IRS Office of Professional Responsibility (OPR) for enrolled agents or the oversight agency in states that license or register tax preparers." (Enrolled agents are tax professionals who are authorized to prepare tax returns and practice before the IRS.)
You might also want to check out the IRS Return Preparer Compliance and Enforcement Center, which documents civil and criminal penalties filed against preparers. These lists include the names of preparers who have been sanctioned.
Most Important - Remember Your Responsibility
No matter who prepares your business tax return, you are responsible. The IRS says, "Remember, no matter who prepares a tax return, the taxpayer [that's you and your business] is legally responsible for all of the information on that tax return."
More on How to Spot a Good Tax Preparer
More about Getting Help with Business Taxes
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Today we sat down with a tax preparer for an hour. She went thru the in’s and out’s of what it meant to “really” own an S-corp. To that end she went thru how we get to file a 1040, what a K-1 is and how to balance distributions with salary and how to best protect your corporate veil.
If your preparer makes the time to sit down and explain everything for you, not only will you feel good about him/her you will feel great about how, where and WHY you make risky/conservative tax deductions/decisions.
All we did is ask for a tutorial and she was most excellent with us! I can’t believe an hour ago i didn’t know the difference between a balance sheet and a P&L statement – and even worse I was OK with that. YIKES!!
Thank god for dedicated people like this. great article Dr Jean!
-jay