Tag Archives: IRS audit

How to Choose the Best Tax Advisor

It’s only mid-way through the fall but it’s not too early to be thinking about your tax returns for next year.

In fact, now is the time to be thinking about your personal and business tax returns especially if you have had issues in the past and want to do it right or better this time. Your tax records and tax filings are too important to be done just by anyone, including yourself, who is unfamiliar with tax laws, deadlines and forms. It could be a serious financial and legal mistake to do it on your own without any advice.

So as the holidays draw closer, begin the search for a tax advisor. Here are Five Things to Consider When Choosing a Tax Advisor:

  1. Relevant Industry Experience: No tax advisor can know everything about every industry. Make sure you are comfortable with the amount of experience the tax advisor has with your industry. Don’t be afraid to ask the advisor if he has other clients in your industry and how long he has been doing work for them. The accounting firm partners should be able to tell you if they have enough experience to handle your case. If not, ask them to send you to a firm that can do it.
  2. Five-year Minimum experience: The senior member should have at least five to ten years of experience in completing business tax returns. Also, better to find a larger accounting firm with a variety of tax advisors. This means that the accountants have had diverse experiences with a variety of industries.
  3. Certified Public Accountant (“CPA”) Designation: As a business owner, your tax advisor should be a CPA at a minimum.  You can also choose an Atty/CPA as your tax advisor.  An Atty/CPA is a dually designated individual who is both an Attorney and a CPA and is generally more knowledgeable than an advisor who is just a CPA.  Either way make sure you have one or the other.  As a business owner you cannot afford not to.
  4. Audit Representation: IRS audits are a fact of life. Even though IRS audits are down recently, you never know and cannot control whether they will audit you next. Even the most honest among us have had to go through the stress and endure the headache of having an IRS auditor reviewing our tax returns. It is, then, crucial for your tax advisor to agree to represent you during any and all audits. They can answer questions, find documents and, most importantly, advise you on any issues druing the audit. You do not want to go through an audit alone. Make sure your tax advisor is there every plodding step of the way.
  5. Fees and Fee Structure: Before you sign up with any tax advisor, find out what they charge for their services. Make sure that you are comfortable with how and what they charge. Being organized with your business records can help prevent your Accounting Bill from getting out of control.  Quicken, Quickbooks, Mint or other accounting programs can help maintain your records in reasonable workable shape. Any paper documents should be organized by type and date. Avoid the “shoebox style of organization” which forces advisors to spend hours (and your money) trying to put it all together. You will save a lot on time and fees (and bad will) by organizing your documents.
  6. Location: With the advent of the internet and the 21st century, your tax advisor does not have to be a few blocks down the road, though being local saves on expenses, especially if you are audited. They can be in another city or state. However, if you have multiple businesses that require a lot of attention from professionals, then you will probably be better served by having someone local who can drop by and advise you on a more frequent basis and keep abreast of your local issues as well.

Yes, it seems too early to be talking about tax advisors, but you may already be rethinking that after reading this blog. That’s good because the next quarterly filing is coming up in January. Don’t go it alone. Find a licensed and experienced tax advisor today.

A.K. Burton, PC has experienced and licensed tax advisors on staff. If you need more advice on business and individual tax planning, contact us at (301) 365-1974 for more information or email us at info@cpa-maryland.com.