Calling for help this tax season

As the only federally licensed tax specialists, enrolled agents must pass a national qualifying exam and take 24 hours of continuing education on tax law to renew their license each year. Many are former IRS agents or employees. They can handle complicated individual returns as well as those of small businesses and corporations, and they can also represent you with the IRS in the case of an audit. “They’re essentially interchangeable with a certified public accountant,” says Siolka, herself a licensed enrolled agent.

Enrolled agents usually charge more than a chain-store tax preparer and less than or comparable to a CPA. Many limit their work to a given tax area, however, so you should inquire about an agent's area of expertise. Another downside is that there are only 40,000 enrolled agents out there, a far smaller amount than the number of CPAs available. You can find an enrolled agent through the National Association of Enrolled Agents or the National Association of Tax Professionals. 

Certified public accountants
A CPA has passed a state's exam for accounting and are thus qualified to prepare financial statements as well as income taxes and represent you to the IRS. But not all CPAs specialize in taxes — some are credentialed financial planners, while others also sell investments and insurance — so they may not be the ultimate expert on matters of taxation.

The CPA’s strength is that they can configure an overall tax plan and can guide you through complex financial situations. If you've recently divorced, retired, opened or closed a business, or had any other lifestyle changes that significantly impact your financial situation, a CPA may be your best bet. But first be sure to ask about their tax experience and how they keep up with changes in the tax law.

To find a CPA in your area, the American Institute of Certified Public Accountants has a state directory, and the National Association of Tax Professionals also has a search tool. Since CPAs can charge $100 and up per hour, ask for references to check before you settle on the professional you want.

Tax attorneys
Tax attorneys have passed a state bar exam and trained in the field of tax law. They also represent clients in disputes with the IRS and other agencies, and defend them in court. “Tax attorneys are the most experienced as knowing the ins ands outs of tax court,” says Siolka. For their time, they can charge you at rates starting at $200 per hour and up.

A tax attorney may be a specialist on the latest tax laws and in tax disputes but most of them don't prepare individual income-tax returns. Therefore, a tax attorney may be your best choice if you want to shelter part of your income or if your situation involves complex corporate matters. They can also plan your estate, draw up wills and trusts, and structure business deals to reduce tax liabilities.

Regardless of which tax preparer you pick, the most important thing to remember is that you are legally responsible for paying the taxes you owe no matter who prepares your return. If you follow poor advice and end up with unpaid taxes, only you bear the consequences.

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