What can a CPA do that a tax preparer can’t?

Well, to tell the truth, pretty much anyone can prepare a tax return for someone else. (For example, tax software can’t tell if it’s you or your aunt who’s entering the info.)

Professional tax preparers, on the other hand, have what’s called a Preparer Tax ID Number (PTIN). At this time, the PTIN doesn’t require a qualifying exam nor a background check (though that will change soon).

A CPA, on the other hand, has a degree, a minimum amount of experience as an accountant, and has passed a qualifying exam that certifies him/her to practice accounting and tax services. CPAs are also held to more stringent requirements for ethics and professional responsibility in their practice than tax preparers. And, they must update their certification regularly with continuing education to retain their status as a CPA.

One big difference between a tax preparer and a CPA, then, is the power to represent you to the IRS should anything go wrong. Not all tax preparers can represent you in an audit, and none can represent you in tax court. CPAs can also specialize in various areas of business, tax regulation, finances, and forecasting and can provide a more holistic financial service.

Posted in: Business Concerns

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