What are the Four Different Types of Tax Preparers?

Finance

The best tax services preparation companies contribute to a fast-growing industry that employs over a million people in a variety of enterprises around the world. Over the last five years, the entire tax preparation sector has grown by 2%, with the vast bulk of this growth driven by the world’s largest tax firms and their year-over-year gains in tax revenues earned.

CPA (Chartered Public Accountant)

A Certified Public Accountant, or CPA, is a person who has been licensed by the state to provide public accounting services. The Uniform Certified Public Accountant Examination, administered by the American Institute of Certified Public Accountants, is required of all aspiring CPAs by all state boards of accountancy (AICPA). CPA candidates must also pass an ethics exam in more than forty states.

A CPA must complete state-mandated continuing education once licensed. CPAs can assist with a wide range of tasks, including:

  • Keeping financial records, examining financial statements, providing auditing services, and preparing tax returns are all things that accountants do.
  • Tax planning and preparation are areas in which some CPAs specialize. The IRS gives CPAs unrestricted representation powers. As a result, they are permitted to represent clients in any tax-related matter, including, but not limited to,
  • Tax audits, payment and collection concerns, and appeals are all things that need to be addressed.

Registered Agents

An enrolled agent (EA) is an IRS-licensed someone who has been trained in federal tax concerns. The IRS allows EAs to represent any type of client—individual or business—in any IRS office on any tax problem. An applicant must pass the IRS’s Special Enrollment Examination to become an EA. This extensive examination covers the following topics:

  • Individual and business tax returns are also prepared.
  • The client’s representation.
  • Other features of working as a tax advisor.
  • EAs must continue their education after they are licensed.
  • They must complete at least 16 hours of continuing education per year, for a total of 72 hours over the course of three years.

Attorney at Taxes

An attorney is a person who is licensed to practice law by the state. In most states, an attorney must have a law degree and pass a state bar association examination (bar exam). Additionally, applicants for a legal license must normally meet specific character criteria. Most states require licensed attorneys to attend continuing education seminars in order to stay current on new laws and changes to existing laws.

A Legum Magister, or LLM, is a postgraduate legal degree earned by some attorneys. This is an optional degree for lawyers who want to specialize in a certain aspect of the law, such as taxation. Tax attorneys use their understanding of the law to help clients with,

Preparing tax returns, tax planning, and advising clients on long-term strategies for lowering their taxes are all things that we do.

Tax attorneys, like CPAs and EAs, have unrestricted authority to represent clients before the IRS.

Tax preparers who aren’t licensed

A non-credentialed tax preparer is someone who does not have any professional credentials or certificates from an external institution like the IRS, the AICPA, or the Bar Association. Seasonal tax preparers who work at tax stores and IRS Volunteer Income Tax Assistance Program volunteers are common examples.

The Annual Filing Season Program is a voluntary program offered by the IRS for non-credentialed tax preparers. Participants get an IRS record of completion certificate after completing eighteen hours of continuing education, which includes a six-hour refresher course on federal tax law.

Non-credentialed tax preparers are required to complete tax education courses in ten states before registering as a tax preparer with the state, but non-credentialed tax preparers are normally not required to have any credentials in the other forty states.

These are the different types of tax preparers, so when you are looking into getting Tax Services, you can make a better-informed decision.