Tax Basics:

Types of Tax Preparers

Tax Preparers
A tax preparer can be any individual who prepares taxes and charges a nominal fee. Most tax preparers work seasonally only and therefore may not be as knowledgeable of the tax laws as the other types of tax professionals. Tax preparers cannot represent you during an IRS audit.

Enrolled Agents
Enrolled agents must first pass an examination that is held by the IRS in order to become enrolled agent. They may have more knowledge than seasonal tax preparers. An enrolled agent may represent their client should the IRS audit them. Enrolled agents cannot perform audit reports.

CPA (Certified Public Accountant)
In order to become a CPA, one must first have a college degree in accounting or related courses before he can even take the CPA examination. CPA exams are held by the state. CPAs can do many things from preparing taxes to representing clients during audits. Only a CPA can perform an audit and certify the audit statements. A CPA may not, however, represent his clients in court.
CFP (Certified Financial Planner)
A certified financial planner can prepare taxes for his clients. However, he cannot represent a client in an audit.

Tax Attorneys
Tax attorneys can prepare the tax returns for their clients, however, they cannot perform audits. Tax attorneys can represent their clients during IRS audits as well as defend their clients in the courts.

A college professor who taught tax accounting can also prepare taxes. In most cases they can also represent their clients in an audit.