1) Don't assume that because a person has the initials "CPA" after his name he is an expert when it comes to federal and state income taxes!Apparently, and for good reason, Flach's post struck a nerve with some tax professionals. Joe Kristan, CPA quickly shot back:
The CPA designation means that a person passed a very difficult test at the beginning of his career, possibly many, many years ago. Only a very small part of this test dealt with federal income tax, and usually with “entity” tax issues (corporate, partnership, estates and trusts) and not 1040 issues. It is certainly no guarantee that he/she is competent or current on federal and state individual income tax law, or that he/she has actually prepared a Form 1040 for a client since passing the test.
Robert D. Flach has put up another one of his occasional posts where beats up on my profession:Don't assume that because a person has the initials "CPA" after his name he is an expert when it comes to federal and state income taxes!He then spends his next 10 paragraphs elaborating on our shortcomings. And that's fine, to a point. Not all CPAs are qualified tax preparers. By the same token, not every lawyer is capable of defending you on a murder charge. But the guy you want by your side when the state wants to send you to the chair is definitely going to be a lawyer. And while not all CPAs should be your tax advisor, many of the best tax advisors are CPAs.
Soon after, Peter Pappas, JD/CPA, added in agreement:
The obvious problem with Flach’s adverse obsession with CPAs is that he continues to compare non-tax-preparing CPAs with tax-preparing unenrolled agents.
The truth, of course, is that few people are ever going to hire a CPA who has no experience preparing tax returns because the non-tax CPA doesn’t solicit tax preparation work. It’s not what he does. He’s an auditor, a forensic accountant, an actuary, but not a tax preparer.
It’s a false choice.
But Flach must make the false comparison because he knows that anyone in his right mind would choose an experienced tax preparer with the letters CPA after his name over a purportedly experienced tax preparer with no letters after his name.¹
The reasons to choose a CPA tax preparer over an unenrolled tax preparer are manifest and manifold.
Here’s five of my favorites:
The CPA has at least a bachelor’s degree in accounting;
The CPA has studied for and passed a rigorous examination testing his knowledge of basic and advanced accounting and tax concepts;
The CPA bi-annually completes many hours of continuing education, which, if nothing else, demonstrates his commitment to the profession;
The CPA is likely to carry malpractice insurance;
The CPA is accountable to and may be sanctioned by the state department of professional regulation.
This, my friends, is a no-brainer.
My two cents, I can't help but to side with Peter and Joe on this one (for the record, I am not a CPA). Obviously, not all CPAs focus their practice on taxation. However, of those CPAs I know specializing in tax, a majority of them are excellent tax professionals. On the other hand, in my experience, finding the same quality of tax professional that is a non-CPA has been more difficult. That is not to say they do not exist. Certainly, there are many great non-CPA tax professionals. I have simply found them harder to find.