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CCH can assist you with stories, including interviews with CCH subject experts.
Also, the 2007
CCH Whole Ball of Tax is available in print. Please
contact:
Leslie Bonacum
(847) 267-7153
mediahelp@cch.com
Neil Allen
(847) 267-2179
neil.allen@wolterskluwer.com
Link to special CCH Tax Briefings on key topics from 2006:
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2007 CCH Whole Ball of Tax
Seeking Professional Help, In Person Or Online, May Be the Only Way to Get
Through This Tax Season
(RIVERWOODS, ILL., January 2007) – The size and complexity of the nation’s
tax law continued to climb in 2006, raising the bar ever higher for taxpayers
as they try to clear the hurdle of doing their taxes this season, according
to CCH, a Wolters Kluwer business and leading provider of tax and accounting
law information, software and services (CCHGroup.com). In 2006, three major
tax packages were enacted, bringing to individuals expanded retirement savings
incentives, new rules for charitable giving, last-minute extensions to a series
of tax breaks and much more.
As millions of Americans try to determine the best way to prepare and file
their taxes this year, one thing is certain: Most people will need all the
help they can get.
“The complexity of your tax return and your own self confidence will
determine whether you prepare your return with pen and paper, take advantage
of do-it-yourself tax preparation software or hand the matter over to a professional
tax preparer,” said CCH Principal Federal Tax Analyst Mark Luscombe,
JD, LLM, CPA.
Below, CCH provides an overview of the general issues that individuals should
consider when evaluating how best to tackle their taxes.
Evaluating Tax Professionals
If you choose to hire a tax preparer, you are in good company. Each year,
more and more taxpayers look to a professional for help. Of the 132.2 million
individual income tax returns filed for tax year 2004, an estimated 78 million
Americans sought the help of an accountant, tax attorney, enrolled agent, retail
tax service or other paid tax preparer.
But, before putting yourself in the hands of a professional, you need to ensure
you have chosen that firm or person carefully. At the end of the day, you are
responsible for what’s on your return, even if it is prepared by someone
else.
Here are some tips to finding the tax professional who is right for you.
1. Identify Several Qualified Candidates
- Go with know-how. It’s a good idea to look for a tax professional
who has consistent experience in tax, especially since tax laws change frequently.
The increasing use of time-delayed effective dates and rate changes that are
phased in and out means that changes can sneak into the tax code with little
notice. Unless you’re tracking tax developments every day, chances are
you’re not aware of all of the changes that have taken effect. With this
in mind, you may also be interested in knowing the preparer’s credentials,
and if she is a member of a professional organization, which encourages or
requires members to pursue continuing education.
- Ask your friends. Ask friends with financial situations
similar to your own if they can recommend to you someone they have worked
with successfully.
- Contact your state CPA, Legal or Enrolled Agent organizations. Many state
organizations maintain databases of local accountants and other tax preparers
and will provide
free assistance in helping you select a tax professional in your area.
Also, many of these organizations provide free assistance to low-income taxpayers
who may not be able to afford tax preparation help. Finally, there are
a
number of Internet sites that provide listings and directories of accountants
organized
by locality.
2. Ask Questions
Here are some of the questions you will want answered when evaluating professionals:
- What is your experience and do you have a specialty? Some tax professionals
have specialties or gear their practice to particular types of professionals
or individual taxpayers. If you have specific concerns or have not been directly
referred, ask for references. Also, if you have financial interests in states
other than where you live, make sure your tax professional is familiar with
those state laws.
- How do you bill your clients? Before you ask your tax professional
to do anything, get a good idea of how he bills and the level of detail
provided. Is the charge an hourly rate or a straight fee? How will you be
billed? Will
you be billed for research time if needed? To avoid confusion, get the
billing and payment terms in writing.
- How do you characterize your professional
style? Find out how aggressive
an approach the preparer takes to minimize the tax burden. Would you
prefer that she is aggressive, even if it means incurring questions from
the IRS
or risking an audit, or would you prefer a practitioner who takes a
conservative path, even if it means paying a few extra dollars?If I am audited,
will you represent me? Ask if he would represent you if the IRS questions
your filing or decides to audit you. While audits
remain rare they’re still unpleasant and time intensive for those
individuals that face an IRS examination. So, ask prospective accountants
how much experience
they have with IRS audits. While some experience is good, too much can
be a warning sign.
- If I am audited, will you represent me? Ask if he would represent you if the IRS questions your filing or decides to audit you. While audits remain rare they’re still unpleasant and time intensive for those individuals that face an IRS examination. So, ask prospective accountants how much experience they have with IRS audits. While some experience is good, too much can be a warning sign.
- What do you need from me? Before providing information to your tax professional, ask exactly what information is needed and in what form. Many professionals provide print or electronic “organizers” to help you sort your financial records. Some ask that all tax information be saved on a diskette, which can be downloaded into tax return software. The more organized you are before you give your tax preparer your records, the better she is able to help you.
3. Do a Final Check
- Make sure your CPA is licensed by the state CPA association. If you
decide to hire a CPA, check with your state CPA Society to verify his or
her license and to see if any complaints have been filed. If complaints
have been
filed, look elsewhere.
- Take a good look at your return before it is filed. Even if your return is prepared and signed by a paid professional, you
are responsible
for the
accuracy of everything on there. Make sure the information on your return
is accurate.
Evaluating Do-it-yourself Online Options
Increasingly, taxpayers are turning to online solutions as a way to prepare
and file their taxes more easily and accurately. The IRS reports that in 2006,
20 million returns were filed from home computers. That said, with the many
different online options available today, taxpayers should take some time up
front to ensure they are selecting a solution that is right for them.
Some questions you should seek to answer when evaluating online tax preparation
software include:
- Is the software provided by a name I know and trust? Now is
not the time
to take chances! You’ll want to find a package with the right options,
features and price for you, but before you delve into the details, make sure
you are going with a provider with a name you know and trust.
- Is the software easy and secure? Using online software can save time
because you don’t have to download the program onto your computer.
But you also want to make sure the program is easy to navigate, helps
you organize
your information in a way that makes sense to you, and provides the support
resources you need to complete your return, for example, a plain-language
glossary of terms and an information guide clearly explaining how to
handle various
tax situations you may encounter. You also want to make sure the online
tax service you choose encrypts your data using recognized Internet security
standards.
- Can I work at my own pace? Online tax preparation sites allow
you to password protect your work, coming back as often as
you need. Make certain
the program also automatically checks for errors or oversights
and provides links to the pages where the problems occur so you can quickly
spot and
correct potentially costly mistakes. Also, while a growing number
of
taxpayers are
now e-filing, check to see that you have the ability to print
and review the final forms before they’re electronically filed with
the IRS or state revenue department.
-
What becomes of your return after you
file? One benefit of using some online programs is that they will save
your prior year’s return, allowing
you to print the return should you need another copy. Also check to see
that it allows you to roll over basic information from one year to the
next, saving
you more time when you begin this year’s tax return.
- Does it clearly show the cost of preparing and filing both
federal and state returns? Navigating the complex pricing structure used by some
tax software providers can be frustrating to taxpayers. Some promote a
federal price or free federal filing but don’t point out the significant
added costs for completing and filing a state tax return. Others have
a multi-tiered
pricing structure that can quickly add up to equal the fees of some tax
preparers. However, most do-it-yourself taxpayers should be able to find
a good tax program
for under $40, including costs for preparing both a federal and state
return, as well as e-filing the returns.
- What are the payment and refund options? Many sites now allow you to deduct the cost of using their program from your
expected tax refund.
Most also allow direct deposit of your refund into your bank account, allowing
you
to access your refund even faster. Some sites also have partnerships
with firms that provide an advance payment of your refund. If this is a feature
you’re
interested in, proceed carefully, making certain the associated fees
and interest are reasonable.
- What are the help and support options? Ideally
the tax prep program you’re using should be straightforward so that
you do not need support. However, you will want this safety net, so look
to see that the program
offers the support features you want, for example, via e-mail or live
online chat.
Premium support features, such as live phone or online chat may come
at a nominal charge.
About CCH, a Wolters Kluwer business
CCH, a Wolters Kluwer business (CCHGroup.com) is a leading provider of tax
and accounting law information, software and services. It has served tax, accounting
and business professionals and their clients since 1913. Among its market-leading
products are The ProSystem fx® Office, CCH® Tax Research
Network™, Accounting Research Manager™ and the U.S. Master Tax Guide®. CCH
is based in Riverwoods, Ill.
Wolters Kluwer is a leading global information services and publishing company.
The company provides products and services for professionals in the health,
tax, accounting, corporate, financial services, legal and regulatory, and education
sectors. Wolters Kluwer has annual revenues (2005) of €3.4 billion, employs
approximately 18,400 people worldwide and maintains operations across Europe,
North America, and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam,
the Netherlands. Its shares are quoted on the Euronext Amsterdam (WKL) and
are included in the AEX and Euronext 100 indices. For more information, visit www.wolterskluwer.com.
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