Choosing someone to handle your financial needs is no less important than selecting your doctor, your dentist, or any other professional service provider.

This guide, created by the Accreditation Council for Accountancy and Taxation (ACAT), is intended to help you identify an accounting/tax professional who is right for your particular lifestyle and financial situation.

How complex is your financial situation? Do you just want to save time? Do you want someone who can save you tax dollars? Are you looking for a service that prepares only your individual tax return, or do you need someone who can help you with business returns too? Do you need someone to advise you throughout the year on how to minimize your taxes, structure personal investments or make tax-savvy business decisions? Are you planning for college? Are you planning for retirement? Is it important to have the same individual or firm prepare your tax returns from year to year, someone with whom you can build a long-term relationship?

Once you have a clear idea of the kind of help you need, you can identify the professional who can provide the assistance you need.

ACAT accreditation is independent verification that the credential holder has the expertise and qualifications to provide sound and accurate taxation and accounting advice to individuals and small-to-medium-sized businesses. Accreditation is earned through participation in study courses, examination, and experience, and maintained by continuing professional education and adherence to the ACAT Code of Ethics and Rules of Professional Conduct. ACAT offers three nationally-recognized credentials, all of which are earned voluntarily.

ACCREDITED BUSINESS ACCOUNTANT^® / ACCREDITED BUSINESS ADVISOR (ABA)

ABAs specialize in accounting services for individuals and small to medium size businesses. They can provide personalized financial reports and interpret those reports for you. These professionals have passed the standardized ACAT examination which tests technical proficiency in financial accounting, reporting, statement preparation, taxation, business law, consulting services, and ethics, and have a minimum of three years of work experience in the accounting/taxation field. Many CPAs and Enrolled Agents have also obtained the Accredited Business Accountant credential. In states where use of the term "Accredited Business Accountant" is prohibited by state law, individuals are referred to as "Accredited Business Advisors." Some states permit use of the term Accredited Business Accountant; others permit use of Accredited Business Advisor only.

 

ACCREDITED TAX ADVISOR^® (ATA)

ATA credential holders have demonstrated the ability to handle sophisticated tax planning issues, including planning for owners of closely held businesses, planning for the highly compensated, choosing qualified retirement plans and performing estate tax planning. ATAs have completed formal coursework and achieved five years of experience in tax preparation, compliance, tax planning and consulting, of which 40% must be in tax planning and consulting.

 

ACCREDITED TAX PREPARER^® (ATP)

ATPs have a thorough knowledge of the existing tax code and the preparation of individual, corporate, and partnership tax returns. These professionals have completed a minimum of 60 hours of formal coursework and have a minimum of three years of work experience in taxation.

CERTIFIED PUBLIC ACCOUNTANTS

CPAs must pass state qualifying exams. In most states, a college degree and work experience are also required. CPAs are licensed to do accounting work up to and including audits and may or may not specialize in tax matters. Some CPAs also hold one or more of the ACAT credentials.

 

STATE LICENSED ACCOUNTANTS

In many states, accountants are licensed (or registered) by the state board of accountancy. States generally recognize these accountants with equivalency to Certified Public Accountants. Some State Boards of Accountancy use ACAT’s Accredited Business Accountant examination as a licensing criterion.

 

TAX ATTORNEYS

Many are qualified to provide advice on tax matters dealing with anything from investments to estate and financial planning. Some tax attorneys also hold one or more of the ACAT credentials.

 

ENROLLED AGENTS

EAs must either pass a two-day exam and background check, or have been employed by the IRS in a job where they applied and interpreted the IRS code and regulations for a minimum of five years. EAs receive their right to practice from the U.S. Treasury. Many EAs also hold one or more of the ACAT credentials.

 

FRANCHISES

These national tax services have offices throughout the country. They usually have extended hours during tax season and serve customers on a first-come, first-serve basis. Cost is based on a set fee schedule depending on how many forms are used. Remember that many of the franchise firms operate during tax season only.

 

 

Talk to friends and business associates about their experiences. Ask them for referrals. Chamber of Commerce activities and service club luncheons are often a good place to talk to others about who they use for their financial services.

Select several tax and accounting professionals you believe are best for your situation, then interview them. Make sure you have a good rapport with each other. Here are some questions you might ask, depending on your situation:

• What professional organizations do you belong to?

• What credentials do you have that demonstrate your proficiency in serving my needs?

• Do your professional organizations have a Code of Ethics and required standards?

• Where did you get your training?

• How do you keep up-to-date on law changes?

• How long have you been in practice?

• How many tax returns do you prepare each year? How many are business returns? Individual? Corporate?

• What is your specialty?

• Are you the person who will do my return? If not, who will be assigned to prepare it? Is the person assigned to do my return present here in your local office? How secure is my tax return information? Will you be sending any of my information out over the Internet, other than e-filing?

• Have you dealt with tax situations like mine?

• How do you double-check for accuracy? What is the turnaround time for a tax return like mine?

• How do you determine your fees?

• Can you be reached during the year? Do you provide year-round tax advisory service?

• Do you offer estate and trust planning?

• Do you do partnership or corporation returns?

• Do you offer tax planning for owners of closely held businesses?

• Will you help prepare and interpret financial statements and other accounting work to help manage my business?

You should now have the information you need to make an educated selection. Choose the one you think will do the best job for you. Hopefully, it will result in a long-term business relationship.

Tax laws and accounting practices are constantly changing. It is imperative that practitioners continuously upgrade their skills and abilities. ACAT, established in 1973 by the National Society of Accountants, identifies and accredits specialists in federal taxation and accountancy who serve the financial needs of individuals and small-to-medium business entities.

ACAT serves as a testing, accrediting, monitoring and disciplinary organization. It requires 90 hours of continuing professional education every three years for tax professionals and 120 hours every three years for individuals accredited in accountancy. When necessary, ACAT enforces its Code of Ethics and Rules of Professional Conduct by investigating complaints and conducting disciplinary proceedings.