Does someone have to be certified to prepare taxes?

Sarah Houston · Joined: 28 Dec 2007 Posts: 1

Does someone have to be certified in any way to prepare taxes for you here
in the U.S.?

I have a friend in Colorado with a small home based business and they
hired some guy last year who was basically just a guy off the street who
prepares taxes for people. The guy wouldn't even sign his name to the
return, he claimed he was just "showing my friend how" to do it themself.

Then the IRS demanded another $75 from them for a mistake this guy made.

But my friend can't afford much, so they didn't go to the big guys either,
like HR Block, who likely would have charged them 3 times as much for the
work.

Archived from group: us>taxes

D. Stussy · Joined: 25 Aug 2007 Posts: 126

"Sarah Houston" wrote in message@216.196.97.142...
> Does someone have to be certified in any way to prepare taxes for you here
> in the U.S.?
>
> I have a friend in Colorado with a small home based business and they
> hired some guy last year who was basically just a guy off the street who
> prepares taxes for people. The guy wouldn't even sign his name to the
> return, he claimed he was just "showing my friend how" to do it themself.
>
> Then the IRS demanded another $75 from them for a mistake this guy made.
>
> But my friend can't afford much, so they didn't go to the big guys either,
> like HR Block, who likely would have charged them 3 times as much for the
> work.

Many but not all states have no requirements for tax preparers. A few
(western) states do.

However, to REPRESENT someone before the IRS, one must generally be an
attorney, a certified public accountant, or an enrolled agent. Anyone who
is not one of those three (or who does not meet a specific relationship
exception) can present information at an audit but cannot act before any
other IRS proceeding.

As far as your friend goes, if he paid the guy, then that guy should have
signed. There is a penalty for not signing.

Paul Thomas, CPA · Joined: 25 Aug 2007 Posts: 3094

"Sarah Houston" wrote
> Does someone have to be certified in any way
> to prepare taxes for you here in the U.S.?

Some states do, most do not.

That may be changing soon, as several in Congress have bandied about the
issue of licensing return preparers.

> I have a friend in Colorado with a small home based business and they
> hired some guy last year who was basically just a guy off the street who
> prepares taxes for people. The guy wouldn't even sign his name to the
> return, he claimed he was just "showing my friend how" to do it themself.

The word "hired" means they were paid. As you've already heard, "paid"
prepaers need to sign the return. Have your friend tell the IRS his paid
preparer didn't sign the return, and supply the name, address, phone number
of the preparer.

> Then the IRS demanded another $75 from them for a mistake this guy made.

To be somewhat fair here, you don't know that it was a mistake of the
preparer when it could be an issue of insufficient data being given to the
preparer.

> But my friend can't afford much, so they didn't go to the big guys either,
> like HR Block, who likely would have charged them 3 times as much for the
> work.

I can't tell how much he paid the paid preparer, but tack on another $75 and
it might have been cheaper to use Block (gag) or some other reputable tax
preparer.

--
Paul A. Thomas, CPA
Athens, Georgia

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