Handling Your Clients’ Accounts – A Tax Preparer’s Obligation

Understanding how you classify as a tax preparer doesn’t just confirm what forms you have to accomplish and submit, it also allows you to set boundaries with your clients on your responsibilities and capabilities as a service provider. In essence, having a clear delineation of tasks ensures that both parties are aware of your limitations.

Understanding how your business differs from other practitioners

Unlike previous decades, enterprises and consumers now have more options to find a reliable service provider. This is why Business-to-business (B2B) companies, specifically accounting firms, need to stay competitive to ensure that they’re reaching the right audience. In fact, being particular about your brand’s identity is an excellent way to retarget your marketing strategies and ensure that you’re matching your services to the right clients.

Listed below are five classifications of tax preparer that you can fall under:

#1: Certified public accountants

After passing the Uniform CPA Examination, certified public accountants receive licensure by state boards in US territories. It’s necessary to complete accounting at a college or university while also accomplishing good character requirements by their respective boards. As a CPA, you must always continue your education to ensure that you’re up-to-date in upholding your license.

#2: Enrolled agents

By receiving licensure through the IRS, enrolled agents need to undergo a suitability check and pass the three-part Special Enrollment Examination. After expressing proficiency in federal tax planning, they need to complete around 72 hours of continuing education to routinely maintain their license every three years. In the end, they will be competent to handle different tax responsibilities, including audits, collection issues, and appeals.

#3: Attorneys

Attorneys receive licensure from state courts, including the state bar. After passing their law degree, attorneys who specialize in tax laws provide services that can coincide with an accountant’s responsibilities, including tax preparation and planning.

#4: Annual filing season program participants

Preparers who don’t have the credentials above can still build an accounting practice, albeit with certain restrictions. For example, annual filing season program participants include individuals who did not accomplish accounting courses but have ample knowledge of handling basic tax preparation duties. Accomplishing these voluntary sessions allows someone to have limited representation rights.

#5: PTIN holders

A step below annual filing season participants is general tax return preparers who have a PTIN number. Since they don’t have the appropriate professional credentials, they cannot represent clients during cases with the IRS. However, they can be present for cases regarding returns.

Conclusion

Taxpayers can determine a preparer’s credentials and qualifications through the IRS’s public directory for the public’s benefit. It contains a searchable and sortable database of accredited tax professionals, including CPAs, attorneys, and even enrolled actuaries with a valid PTIN.

This is ultimately why you need to uphold quality services in good faith, regardless of where you got your licensure as a tax preparer. This is why optimizing your accounting processes are crucial to your business. Furthermore, you must equip your business with the necessary tools to keep up with your clients’ demands. Accounting firms have access to digital tax preparation software that can speed up their work output and mitigate human error risk. By embracing automation, you can focus on securing more clients without worrying about overloading your staff!

Integrating the latest bookkeeping tools is necessary for accountancy firms to service their clients with an effective business model. We can supplement your business with tax software for preparers to optimize your accounting processes. Try out our free demo today, and find the right subscription package for your business!

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