As Ben Franklin famously observed, there are two things guaranteed in life: death and taxes. With tax season underway, it’s critical to ensure your IRS enrolled agent is promptly–and correctly–filing your taxes. Here are seven warning signs that might indicate an agent is making your situation worse:
No strategic plan
Your IRS enrolled agent should be doing continuous strategic planning and not simply filling out and filing your return. A computer can file your taxes. You are paying for the advice relationship, and your IRS agent should be frequently monitoring your tax situation.
If an IRS enrolled agent makes generalized statements or guarantees a refund amount without knowing your financial situation, be careful. The agent may not be doing everything possible to maximize your return, or he may be dishonest when filing your taxes.
Cheats on taxes
If your IRS enrolled agent starts making offers to lower your taxable income by inventing or inflating deductions or to boost your tax refund, leave. Ultimately, he’s doing you no favors. Other warning signs: if he won’t give you a copy of the filing or if he refuses to sign your return.
Doesn’t know your industry
The enrolled agent must know your company’s industry and be familiar with how business is conducted in that sector in order to apply specific codes or tax breaks that will help to lower your tax bill.
Fails to explain financial statements
If you have not learned how to read your financial statements, your IRS enrolled agent should be helping you. If he isn’t, that could be a sign that he’s being dishonest with your accounting. And regardless, do you want an adviser who wants to keep you in the dark? Go elsewhere.
Fails to maximize your deductions
While some agents are too aggressive, claiming dubious deductions, other IRS enrolled agents can be too strict and limit legitimate claims. Get permission to talk to other clients or find companies in similar industries to see if there are more deductions available for you.
If the IRS enrolled agent always files their returns late, move on. Also, if your agent cannot give you a quarterly financial statement analysis on time, that’s another red flag.
The IRS suggests all taxpayers check for their enrolled agents’ licensure status and for any disciplinary actions against them by the IRS Office of Professional Responsibility. By verifying your enrolled agent, you reduce the chance of hiring a disreputable (even criminal) preparer.
If you need tax resolution, we have the enrolled agent for you. Please call us at 720-398-6088.