Tax preparers, whether basic tax preparers or certified public accountants have several common traits regardless of various levels of training. Tax accountants need to understand and know the details of financial accounting. Besides, they also have to complete some level of formal training and education apart from having proper experience in preparing tax return. The tax accountants also need to be qualified enough to symbolize the taxpayers before Internal Revenue Service.
The tax accountants have to be aware of all the differences between financial accounting and tax accounting. The business financial documents like income statements, balance sheets and cash flow reports are arranged by using the generally accepted principles of accounting. However, federal tax returns are prepared as per the IRS tax code.
IRS tax code:
As per IRS, the biggest issue that the US taxpayers often face is the federal tax code. So, the tax accountants need to understand and learn the contradictions and complexities related to the tax code. As the government changes the tax regulations on a regular basis, the tax payers need to take up continuing courses of education to be updated on the recent changes.
Experience and education:
Tax accounting can be complicated and the clients need to be sure that the tax preparers that they hire know well what they are doing. So, the first step is education. Accounting students have to graduate from accredited schools from where they get education on basic accounting before doing specialization in taxation. The majority of the tax accountants should have a bachelor’s degree in the field of accounting. Next it comes to experience. The majority of the tax accountants begin their career while working under the management of a professional tax accountant to specialize in the complexities. Besides, these people should have a hands-on expertise while it comes to applying the theoretical knowledge to the real life situations.
Representation of the tax payer:
Last but not least, an expert tax accountant needs to be aware of the ways to represent the clients before IRS. So, it is necessary to be aware of the IRS policies and processes and the tax codes to successfully represent the clients during audit. Besides, it is also necessary to be aware of the case law and the tax law to practice in the tax court. Apart from that, meeting the education and certification standards of education is also necessary as well.