WebCPA Tax Advice: Avoid IRS Audit by Hiring Licensed Tax Preparer

WebCPA Tax Advice: Avoid IRS Audit by Hiring Licensed Tax Preparer

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WebCPA weighs in on the relative qualifications of unenrolled tax preparers in a post titled Tips for Small Businesses on Avoiding an IRS Audit:

Unlicensed tax preparers are not required to hold a high school diploma or have training in tax preparation. In fact, The Treasury Inspector General for Tax Administration (TIGTA) found that only 39 percent of the returns prepared by this group were correct, and is currently considering regulation.

The authors also interviewed the San Francisco accounting firm of Shwiff, Levy & Polo and here is their advice on how to avoid an IRS audit:

  1. The client should use accounting software to keep books on a daily basis and input all financial transactions into this software.
  2. The client should use one database for their business and one for personal financial data to ensure that 100 percent of financial transactions are recorded.
  3. The client should verify that the tax preparer is licensed, and question them to determine if they are knowledgeable about the exceptions for small business enterprises.

On it’s face this seems like common sense, but I’m afraid some folks can’t seem to accept the patently obvious. 

Prediction: Some sensitive unenrolled preparer types will attack the motives of the folks at WebCPA.com and at Shwiff, Levy & Polo. They will accuse them of advising taxpayers to hire only licensed preparers (i.e. CPA, lawyer and IRS enrolled agent preparers) merely in order to fatten their own wallets. Tsk. Tsk.

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About Peter Pappas

Peter is a tax attorney and certified public acccountant with over 20 years experience helping taxpayers resolve their IRS and state tax problems.

He has represented thousands of taxpayers who have been experiencing difficulty dealing with the Internal Revenue Service or State tax officials.

He is a member of the American Association of Attorney-Certified Public Accountants, the Florida Bar Association and The Florida Institute of Certified Public Accountants and is admitted to practice before the United States Tax Court, the United States Supreme Court, U.S. District Courts - Middle District of Florida

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