How tax advisors earn your trust

Small-business owners know that a sterling reputation is earned through ethical practices, reliability and professionalism. When it comes to finding the best tax service for your company's taxes, you'll save time and aggravation by learning to tell the difference between a tax preparer and an advisor you can trust.

Conducting your due diligence may be more work up front, but the stakes are too high for small-business owners to forego. Become familiar with ways poor or fraudulent tax preparation practices harm your business financially and what steps to take to ensure that issues resolve in your favor.

Ways Tax Preparers Could Hurt your Business

Unfortunately, tax fraud is a well-known headline that can damage a brand's reputation. The IRS describes the following as tax preparer misconduct:

• Falsely claiming to be a certified public accountant (CPA).
• Not signing the tax return with a preparer tax identification number.
• Providing false information to garner a client a larger refund.
• Depositing a client's refund into an account the client doesn't authorize or own.

No matter who prepares your return, in the eyes of the IRS and the state authorities, you're the responsible party for your tax return. It's imperative that you review your tax return for accuracy and completeness before it's filed.

Do your due diligence before you hire a tax preparer.

Questions to Help Small Business Owners to Find the Right Tax Preparer

Choosing the right tax preparer for your business starts with your own understanding of your business's financial situation.

• Do you have employees?
• Are you current with your estimated tax payments?
• Did you conduct any research and development that qualifies your business for a tax credit?
• Do you expect a refund?
• Do you need your cash right away?

Answering these questions will help clarify your company's finances and tax liabilities, which is critical to finding the right tax preparer.

A referred tax service  — no matter how glowing the recommendation — needs to fit your business. Finding the answers to these questions will help vet them.

Does the tax preparer have credentials, such as a CPA or a Juris Doctor, that you can check with a state board or association?
If so, what's their standing within said professional associations or the Better Business Bureau?

Be sure of the service offering before you contract with them. The following are key questions.

• Will the tax preparer answer inquiries about your return?
• Are they allowed to represent you to the IRS?
• Is your tax preparer available to you after filing your return for questions or advice?
• Do they use electronic filing?

One last caveat emptor is the conditions of payment. You have to sign and should receive a copy of your filed return. Under no circumstances should your return or your documents be held by the tax preparer in exchange for payment. Furthermore, if the payment amount is based on your refund, that is a red flag.

Report tax preparation misconduct to the IRS.

Steps to Resolve Tax Preparer Issues

You can avoid costly mistakes and save time in the long term by performing due diligence on your tax preparer in advance of hire. However, it can be hard to discern a "good" tax preparer, especially if this is your first time with a professional tax service provider.

If you discover that your tax preparer has violated federal or state tax laws, it's critical that you report the misconduct to the IRS and your state authorities. A quick search for your state's tax fraud hotline or email account will help you find the first place to log your complaint.

The Law Offices of Donald W. Hudspeth, P.C. is here to help small-business owners like you avoid trouble and protect you from unfair business practices. Contact us if you believe your tax preparer has harmed your company's interest.

Categorised in: Starting a Business in Arizona

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