Understanding Paid Tax Preparer Options: From Chains to Credentialed Professionals

Filing taxes is something every taxpayer must do, and there are several ways to get it done. Some people prepare their own returns using IRS forms or tax software. While self-preparation is a valid option, especially for simple returns, many taxpayers find value in hiring a professional. A paid preparer can help reduce errors, identify deductions or credits you may have overlooked, and provide guidance for complex financial situations.

Not all paid tax preparers are credentialed professionals like Enrolled Agents, CPAs, or attorneys. Many commercial tax preparation companies and independent preparers fall into this category. While these preparers may have significant experience, they are not required to meet uniform federal standards unless they participate in the IRS’s voluntary Annual Filing Season Program (AFSP). Non-credentialed preparers have limited authority before the IRS. Unless they complete the AFSP, they cannot represent clients in audits or appeals.

Why choose a non-credentialed preparer?

• Often less expensive than credentialed professionals.

• Convenient for straightforward returns, especially when offered at large chains.

• May provide seasonal availability for quick tax filing.

Limitations: Non-credentialed preparers have limited authority before the IRS. Unless they complete the AFSP, they cannot represent clients in audits or appeals. Taxpayers should always verify the preparer’s PTIN (Preparer Tax Identification Number) and reputation before hiring.

Enrolled Agents (EAs)

Enrolled Agents are federally licensed tax practitioners who specialize in taxation. They are authorized to represent taxpayers before the IRS in audits, collections, and appeals. EAs must pass a comprehensive IRS exam or have prior IRS experience, and they are required to meet ongoing education standards.

Why choose an EA?

• Expertise focused entirely on taxation.

• Often more affordable than CPAs or tax attorneys.

• Suitable for individuals, families, and small businesses seeking year-round tax planning and preparation.

Cost: Typically moderate, depending on return complexity.

Certified Public Accountants (CPAs)

CPAs are licensed at the state level and must meet strict education, testing, and experience requirements. While not all CPAs focus on tax, many specialize in tax planning, preparation, and financial consulting. CPAs can also provide services beyond taxes, such as auditing, financial statements, and business advisory.

Why choose a CPA?

• Broad financial expertise, ideal if you need help beyond just taxes.

• Can assist with business strategy, financial planning, and compliance.

• Well-suited for complex tax situations, high-income earners, or businesses needing ongoing accounting services.

Cost: Generally higher than EAs due to broader expertise and licensing requirements.

Tax Attorneys

Tax attorneys are licensed lawyers who specialize in tax law. While they may not typically prepare routine tax returns, they are invaluable in situations involving disputes with the IRS, complex estate planning, business structuring, or litigation.

Why choose a tax attorney?

• Legal expertise for disputes, audits, and appeals.

• Strong choice for taxpayers with complicated business structures, foreign income, or potential legal issues.

• Can provide attorney-client privilege for sensitive matters.

Cost: Usually the highest of the three options due to their legal training and services.

Free Tax Assistance: VITA and TCE Programs

For those who qualify, the IRS also sponsors free tax preparation assistance. The Volunteer Income Tax Assistance (VITA) program helps taxpayers with incomes generally under $67,000, persons with disabilities, and limited English-speaking taxpayers. The Tax Counseling for the Elderly (TCE) program focuses on taxpayers aged 60 and older, particularly with pension or retirement-related questions.

These programs are staffed by IRS-certified volunteers and are a reliable option for qualifying individuals.

Final Thoughts

Whether you file your taxes yourself, use a credentialed professional, or choose a seasonal preparer, the right choice depends on your needs, budget, and the complexity of your financial situation. For most taxpayers, working with a qualified professional provides peace of mind and ensures compliance with ever-changing tax laws.

If you’d like guidance on which type of preparer is best for your situation—or if you need professional tax and bookkeeping support—reach out to Green Trails Bookkeeping & Tax. We’re here to help you navigate the process with confidence.