When deciding between a tax attorney and an accountant, you need to understand the services each tax professional provides. Tax attorneys specialize in the minutiae of IRS regulations and are great for estate planning, setting up a business and providing attorney-client privilege in the event of tax audits. Accountants and CPA’s, on the other hand, specialize in helping you maintain your business and financial records and maximize your tax benefits. If you’re looking for help with your business finances, the following eight questions will help you find the right accountant or CPA for your company.
1. What services do you provide?
Most accountants offer a wide range of services, and you will want to know exactly what they provide and how they package those services. Knowing what your needs are beforehand will help you determine which accountant is right for you. Also, keep in mind that a CPA can represent you in an audit with the IRS, while an accountant may not be able to so.
2. Are you familiar with my industry?
Depending on the type of business you have, you may want to find an accountant who is familiar with your company and the tax laws that apply to your industry. A general accountant may not know the ins and outs of your particular business and may miss out on valuable tax deductions and other tax concerns due to that lack of knowledge.
3. How do you bill your clients?
Does the accountant firm or CPA bill by the hour or monthly? Most firms will bill hourly, but there are those who only bill monthly. Make sure you’re clear about everything included in the monthly billing option and that the services meet your needs.
4. Can you represent me if I’m audited by the IRS?
No one wants to be audited, but if you are, you want to have the proper representation. Tax lawyers and CPAs are qualified to represent you during a tax audit, but not all accountants are. If you’re thinking of going the accountant route, ask how many tax audits they’ve participated in and how successful they were. You may never get audited, but similar to insurance, you want an accountant with experience dealing with audits just in case. If you are being audited in relation to a potential tax evasion or tax fraud issue, talk to a tax lawyer.
5. Can you represent me in all states?
If you have a business that operates in multiple states, you’re going need an accountant or CPA who can work in all the places you do business. Many states offer reciprocal agreements, but you want to make sure that’s the case with the accountant you’re hiring so there won’t be any problems down the line.
6. How often should we meet outside of tax time?
There may be other ongoing financial issues you want to discuss throughout the year with your accountant outside of tax time. Your accountant can help you deal with the tax implications of financial planning, retirement planning and hiring employees vs. hiring contractors. Based on your billing structure and services provided, see if your accountant can help with these ongoing financial concerns.
7. Can you help me grow my business?
Like legal advice, good financial guidance can help you grow your business over time. Develop a financial plan with your accountant, and update it as you grow with their assistance. Similar to the relationship with your lawyer, you want this relationship to the last over the long haul.
8. What is the best way to contact you?
With all the various ways to communicate these days, you need to know the best way to get in contact with your accountant. Do they prefer email or phone calls? Is teleconferencing an option? A clear line of communication is key to getting the most out of your relationship with your accountant.
Choosing the right accountant or CPA is just as important as choosing the right lawyer or location for your business. Use these eight questions to properly vet potential hires so you can feel comfortable that your business finances are in the right hands.