A guide to choosing the right tax professional for your situation, comparing CPAs, Enrolled Agents, and tax attorneys, including credentials, costs, and when to hire each type.
Identify the complexity of your tax situation: simple W-2, self-employed, investments, rental property, or international
A single W-2 filer with standard deduction rarely needs a professional. Once you add self-employment income, rental properties, stock options, or foreign accounts, the risk of errors and missed deductions increases enough that professional fees often pay for themselves.
Determine if you need ongoing tax planning or just annual preparation
Tax preparation is filing your return once a year. Tax planning is year-round strategy: timing income, maximizing deductions, retirement planning, and entity structuring. Business owners and high-income earners benefit most from planning. Preparation alone costs $200-$500; ongoing planning adds $1,000-$5,000+ per year.
Check if you have any IRS issues requiring representation: audits, back taxes, or collections
If you're facing an audit, owe back taxes, or have received IRS collection notices, you need someone with IRS representation rights. Only CPAs, Enrolled Agents, and tax attorneys can represent you before the IRS. Seasonal tax preparers without these credentials cannot.
Determine your budget for tax services
Average costs vary widely: seasonal preparers charge $200-$400 for a basic return. CPAs charge $300-$700 for individual returns, $1,000-$3,000 for business returns. EAs charge similar rates to CPAs. Tax attorneys charge $250-$500 per hour and are rarely used for simple preparation.
Understand the Types of Tax Professionals
CPA (Certified Public Accountant): state-licensed, broad accounting and tax expertise
CPAs pass a rigorous 4-part exam, require 150 college credit hours, and complete annual continuing education (40 hours in most states). They can prepare returns, represent you before the IRS, and provide audit support. Best for business owners, complex financial situations, and people who want one professional for both tax and accounting.
EA (Enrolled Agent): federally licensed, tax-specialist credential from the IRS
EAs pass a 3-part IRS exam (the Special Enrollment Examination) and complete 72 hours of continuing education every 3 years. They specialize exclusively in taxation — not broader accounting. EAs often cost 10-20% less than CPAs for the same tax work. Best for individual tax preparation and IRS representation.
Tax attorney: law degree plus specialization in tax law
Tax attorneys handle legal tax matters: tax court cases, criminal tax investigations, estate planning, complex business transactions, and IRS disputes involving potential fraud. They charge $250-$500+ per hour. You don't need a tax attorney for standard tax preparation — only when legal issues are involved.
Annual Filing Season Program (AFSP) preparer: basic IRS-recognized credential
AFSP participants complete 18 hours of annual continuing education. They can prepare returns but have limited IRS representation rights (only for returns they prepared). This is a step above uncredentialed preparers but below CPAs and EAs. Suitable for straightforward returns only.
Uncredentialed tax preparers: no IRS credentials or state license required
Anyone can prepare tax returns for pay — there's no federal licensing requirement. Uncredentialed preparers cannot represent you before the IRS at all. They must have a PTIN (Preparer Tax Identification Number) but face no exam or education requirements. Use with caution for simple returns only.
Research and Verify Credentials
Search the IRS Directory of Federal Tax Return Preparers with Credentials
The IRS maintains a searchable directory at irs.treasury.gov/rpo/rpo.jsf that lists CPAs, EAs, and attorneys with valid PTINs. If a preparer isn't in this directory, they have no credentials recognized by the IRS. Check before hiring.
Verify CPA licenses through your state's board of accountancy
Each state has a board of accountancy with an online license lookup tool. Verify the CPA's license is active and in good standing. Check for any disciplinary actions. A CPA licensed in one state may or may not be authorized to practice in another.
Verify Enrolled Agent status through the IRS or the National Association of Enrolled Agents
EAs are federally licensed and can practice in all 50 states regardless of where they're located. The IRS directory confirms EA status. The NAEA (naea.org) also has a member search tool. Unlike CPAs, EAs don't need state-by-state licensing.
Check for complaints with the Better Business Bureau and state attorney general
Search the BBB website and your state attorney general's consumer complaint database. Also check online reviews, but give more weight to detailed reviews over star ratings alone. A pattern of complaints about errors or unresponsiveness is a red flag.
Confirm the preparer has a valid PTIN (Preparer Tax Identification Number)
Every paid tax preparer must have a PTIN from the IRS. They must include their PTIN on every return they prepare. If a preparer refuses to sign your return or include their PTIN, do not use them — this is a major red flag and an IRS violation.
Interview and Evaluate Candidates
Ask about their experience with your specific tax situation
If you have rental properties, ask how many landlords they serve. If you're an expat, ask about their experience with Forms 2555 and 1116. Specialization matters more than years of experience. A generalist CPA with 20 years may know less about crypto taxes than an EA who focuses on it.
Ask how they charge: flat fee, hourly, or per form
Flat fees give you cost certainty. Hourly rates ($100-$400/hour) can spiral if your situation is complex. Per-form pricing ($50-$150 per additional form) is transparent but adds up. Get a written estimate before engaging. Ask what triggers additional charges.
Ask about their availability during tax season and year-round
Some preparers are only available January through April. If you need year-round advice or have an audit in July, make sure they're accessible. Ask about response times — a preparer who takes 2 weeks to return calls during tax season may not serve you well.
Ask if they carry professional liability (errors and omissions) insurance
E&O insurance protects you if the preparer makes an error that costs you money. Most CPAs and EAs carry it, but it's not required everywhere. If a preparer doesn't have insurance and makes a $5,000 mistake, you may have no recourse beyond small claims court.
Ask who will actually prepare your return — the professional or a junior staff member
At larger firms, a partner may sell the engagement but an associate prepares the return. Ask who does the work and who reviews it. You want the credentialed professional at least reviewing your return. Paying CPA rates for work done by an unlicensed staff member isn't ideal.
Red Flags to Avoid
Avoid preparers who promise a specific refund amount before seeing your documents
No legitimate preparer can guarantee a refund amount sight unseen. Promises of inflated refunds are a hallmark of fraud. The IRS holds preparers liable for fraudulent returns, and you can also face penalties, interest, and repayment of the inflated refund.
Avoid preparers who charge a percentage of your refund
Percentage-based fees create an incentive to inflate your refund. A preparer charging 10% of a $5,000 refund ($500) may be tempted to push deductions to get you a $7,000 refund ($700 fee). Flat fees or hourly rates align the preparer's interest with accurate filing.
Avoid preparers who won't sign the return or include their PTIN
Paid preparers are legally required to sign the return and include their PTIN. A preparer who refuses is called a 'ghost preparer' — they want to avoid responsibility for errors. This is a violation of IRS regulations and a sign of an untrustworthy preparer.
Avoid preparers who ask you to sign a blank or incomplete return
You are legally responsible for everything on your tax return, even if a preparer made the mistake. Never sign a return you haven't reviewed. Read every line, ask about anything you don't understand, and verify the numbers match your documents.
Avoid preparers who direct your refund into their own bank account
Your refund should always go to your bank account or be sent directly to you. A preparer who asks to have the refund deposited into their account — even temporarily — is violating IRS rules. This is a common scam that results in stolen refunds.
Frequently Asked Questions
What is the difference between a CPA, enrolled agent, and tax attorney?
A CPA (Certified Public Accountant) is licensed by the state and handles tax preparation, planning, and financial statements. An enrolled agent (EA) is federally licensed by the IRS and specializes specifically in tax matters — they can represent you before the IRS at all levels. A tax attorney is a lawyer specializing in tax law, ideal for complex legal disputes, criminal tax matters, and estate planning. All three can represent you in audits, but attorneys offer attorney-client privilege, which CPAs and EAs do not.
How much does a tax professional charge for a return?
The national average for preparing a Form 1040 with itemized deductions is $250-$400. A simple W-2-only return costs $150-$250. Business returns (Schedule C) add $200-$500 depending on complexity. S-Corp or partnership returns (Forms 1120-S or 1065) run $800-$2,000+. Pricing varies significantly by region — CPAs in New York or San Francisco charge 30-50% more than those in smaller markets. Many professionals offer a free initial consultation to estimate your cost.
How can I verify a tax professional's credentials?
For CPAs, check with your state board of accountancy — each state has a license lookup tool. For enrolled agents, use the IRS directory at irs.treasury.gov/rpo/rpo.jsf. For tax attorneys, verify with your state bar association. You can also check the IRS Return Preparer Office directory for any tax preparer with a valid PTIN (Preparer Tax Identification Number). A PTIN alone is the minimum requirement — it does not indicate any specialized credential or testing.
When should I hire a tax attorney instead of a CPA or EA?
Hire a tax attorney if you face potential criminal tax charges, need to negotiate a complex Offer in Compromise, are involved in international tax structuring, have tax fraud allegations, or need estate and trust planning involving tax issues over $5 million. Attorneys are also preferable when you need privileged communication — anything you tell your tax attorney is protected, while CPA communications can be subpoenaed in some circumstances. For routine tax preparation and standard audits, a CPA or EA is more cost-effective. Tax laws change frequently — verify current rules with the IRS or a tax professional.
What questions should I ask before hiring a tax preparer?
Ask about their credentials and continuing education requirements, how many years they have prepared returns like yours, what their fee structure is (flat fee vs. hourly), whether they will represent you in an audit at no extra charge, and what their error guarantee policy covers. Also ask if they sign the return as the paid preparer — reputable professionals always sign. Walk away from any preparer who bases their fee on a percentage of your refund, guarantees a specific refund amount before seeing your documents, or refuses to provide their PTIN.