Appendix B

How to Find a Good Accountant

The question that I get asked most frequently at seminars is, “How do I find a good accountant?” Sadly, it is very tough finding the right, knowledgeable accountant.

First, not all accountants specialize in taxes. Many accountants perform audits, computer studies, and the like. Second, many accountants are timid! They would love for you to send in 100 percent of your income (less their accounting fee).

Accordingly, there are some questions that you can ask in order to see if an accountant is right for you. Here are some suggestions:

  1. What designations or credentials do you have?

          Look for enrolled agents (people who pass a special IRS examination), certified public accountants, ex-IRS agents, attorneys, etc. I like preparers with legal backgrounds, because they tend to be more aggressive.

  2. Are you in practice full time?

          Hopefully, the answer will be yes.

  3. How many years’ experience do you have in tax practice?

          You don’t want a rookie experimenting on you!

  4. Do you prepare all returns by computer?

          Handwritten returns ended with the ’80s.

  5. What are your fees and do you have a written fee schedule?

          Cheaper is not necessarily better. You may get what you pay for!

  6. Can you provide references from other businesses similar to my own?

          Many accountants, rightly, don’t give out names of clients. However, all firms should have some happy clients who will be willing to speak to you. When you call them, ask them, “What do you like about the accountant?” and “What would you improve about his/her services?”

  7. Do you use any checklists to maximize my deductions?

  8. Test your accountant.

          Tell him/her that in a tax reduction book and seminar it was suggested “to hire your spouse and make that person the primary insured so you can deduct medical insurance premiums and set up a self-insured medical plan.” Ask what the accountant thinks of this strategy.

  9. Do you teach any tax courses or have you written any tax publications?

          The more, the better.

10. Are you conservative, aggressive, or somewhere in the middle?

11. What review process do you use in order to ensure a quality product?

12. May I look at your tax library?

          Accountants need to look things up. The more sources, the better. They should have at least two separate tax research sources.

13. Do you specialize in taxes?

          They should say yes!

14. What percentage of your practice relates to taxes? What other accounting services do you personally perform?

15. What is your attitude toward tax audits?

          Unfortunately, many tax preparers recommend not taking legitimate tax breaks at all if it could possibly trigger an audit. These accountants are a “hazard to your wealth.”

16. How do you treat gray areas?

          The best advisors will tell you that the area is gray and give you your options. Stay away from advisors who say, “The area is not clear, so don’t take the deduction.”

17. What do you do after tax season?

          You want to hear that he/she does other accounting work and also does marketing for new clients.

18. How often do you take tax courses?

19. Have you ever been disciplined by the IRS or any accounting society?

          If an accountant refuses to answer this question or acts insulted, forget it!

20. How many other clients like me do you have?

          You don’t need hundreds, but more than 10 would be helpful.

21. Do you offer pre-year-end tax planning as part of your tax service? If so, is there an extra fee for this?

22. Do you offer any tax planning during the year?

23. How soon do you return calls from clients?

24. Give me a tax-planning tip based on a recent tax change that may benefit me.

          If you need a firm to represent you before the IRS, as a rule, the firm’s “Track Record” is the best objective indicator of how that firm will manage your case. Listed below are some of the additional key questions to be addressed:

25. How many years has the firm been in business?

26. Has the firm been designated as a Certified Tax Resolution Specialist?

27. Does the firm discuss all options available to the taxpayer to resolve their tax problem?

28. How many Offers in Compromise has the firm successfully settled?

29. What is the firm’s success rate—total dollars negotiated in settlements divided by total dollars in tax, interest, and penalties owed?

30. What is the firm’s rating with the Better Business Bureau?

31. What is the firm’s Credit and Financial rating with Dun and Bradstreet?“

Finally, there are certain other areas of concern that you should watch for in order to avoid unscrupulous firms. They are:

     •   Beware of organizations and telemarketers that are paid on an incentive basis for bringing your business to their firm.

     •   Be especially aware of unrealistic promises or improbable results. You want to be sure that you receive top quality work and that you get the services that you pay for. I would avoid any firm that promises you that you will only have to pay pennies on the dollar to the IRS without first scrutinizing your complete financial situation.

     •   Beware of firms that charge you a fee exclusively based on the amount of money that you owe the IRS. Usually, the same amount of work is required to solve both large and small tax obligations.

     •   Ask the tax resolution firm direct questions about your case. If the firm is evasive or their answers seem intentionally complex or unclear, it is possible that they are trying to cover up information about your representation or quality of service that they may or may not provide. You deserve straightforward answers.

Conclusion

These questions may not be all-inclusive. However, they will certainly “separate the wheat from the chaff” and enable you to make much better decisions as to whether an accountant is right for you!