Finding the Right Tax Professional

Today's tax question comes from Ling in Germany. She asks, "My husband and I are being audited by the IRS. We have tried dealing with this ourselves, but haven't made much progress. Would you recommend that we hire a tax professional?"

I definitely recommend hiring a tax professional when dealing with the IRS audits and tax collectors. However, don't just hire anyone, here's how to narrow down your search for the tax professional who is right for you.

As I state in my article on how to find an accountant, finding a tax professional is all about you. It's about what you need, and the expertise you demand to help you solve your tax troubles in the shortest amount of time. You can find excellent tax professionals in many different places, a retail tax office, a small independent firm, or even a large tax firm. The point is simple: find the right person. Brand and corporate names are practically meaningless. What you need is the person's knowledge and skills.

Here's what you should be looking for. Find a certified public accountant, enrolled agent, or tax attorney. These are the only professionals who can represent you before the IRS in audit and collection matters.

Not every tax professional specializes in audits. When calling around, about the person's areas of expertise. You need a professional who has expertise in audits. Based on the fact you are writing from Germany, I assume you live and work there. So you will need your tax professional to know how foreign income is reported and taxed. At minimum your tax professional should know about audits, the foreign earned income exclusion for US citizens and resident aliens, the foreign tax credit, and the US-Germany Tax Treaty. That checklist of required knowledge should help narrow down your search pretty quickly.

The difference between finding the right person and the wrong person is huge. The right professional will be able to diagnose your problems quickly and efficiently, and go right to work in handling your IRS auditor. The wrong person will take a few days or weeks to "research" how to do this, and then will get back to you long after it's too late to make a difference. You don't want to waste your time and money.

The best tax professionals will tell you upfront what their expertise is, and will let you know immediately if they don't have the knowledge and expertise needed to work on your taxes.

Throughout the tax season I will be answering one tax question per day. Do you have a question? Visit the Ask a Tax Question page. Disagree with my answers? Post your comments in the Tax Forum.