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Most tax preparers don’t have credentials
Despite the talent shortage, vetting is important because “pretty much anyone can call themselves a tax preparer,” Young said.
The IRS receives more than 160 million federal tax returns every year and most come from paid preparers, according to the National Taxpayer Advocate’s 2024 Purple Book of legislative recommendations.
There are no federal licensing or competency requirements, and some paid preparers have no training or experience, the report noted. Under current law, the minimum requirement for paid professionals is an IRS-issued preparer tax identification number, or PTIN.
However, certified public accountants, enrolled agents and attorneys — professionals with unlimited representation rights before the IRS — generally pass competency tests and have continuing education requirements.
Free preparation options like Volunteer Income Tax Assistance, or VITA, and Tax Counseling for the Elderly, or TCE, also have competency standards.
How to vet your tax preparer
Unlike big box preparers, many tax professionals don’t accept walk-in traffic and operate mainly by referral, according to Tom O’Saben, an enrolled agent and director of tax content and government relations at the National Association of Tax Professionals.
“Talk to your friends and associates who have had a good experience with their [tax] professional,” he said. “Reach out to them now to see if they’re taking new clients.”
You should also weigh fee structure and availability outside the traditional tax season, which you may need if issues arise, Young said. “Cost is a big factor, but it shouldn’t be the only basis for your decision.”
The IRS keeps a database of credentialed preparers, including those who participate in the agency’s Annual Filing Season Program, which includes yearly refresher tests and continuing education.
You can check CPA and attorney licenses through state boards. Since the IRS oversees enrolled agents, you can email the agency to check licenses.
