What Knowledge and Skills Should a Tax Preparer Have?
November 17, 2017
Since 2001, tax preparers have been required to undergo a federal tax law examination to prove their technical skills and knowledge by the IRS. While there are no educational or experience requirements necessary to become a tax preparer, the more successful ones will have the following knowledge and skills to help businesses file their tax returns, along with having passed the exam set by the IRS:
Critical thinking skills:
Determining whether a client qualifies for deductions and credits is not always obvious, and requires the tax preparer to possess strong analytical skills and reasoning. Categorizing incomes and losses, is not easy either, and deductive reasoning and a sharp mind are required, as well as sound judgement in establishing the advantages and disadvantages of taking a certain course of tax action.
Economics and accounting:
Sound knowledge of the principles pertaining to economics and accounting, financial markets and banking is required, along with the analysis and reporting of financial data.
Customer service skills:
Often underrated, this is an important element of a tax preparers role, and a good tax preparer must accurately assess their customer’s needs, meet the quality standards for the service they are providing, and be able to evaluate customer satisfaction.
Active listening techniques are essential for any good tax preparer to have mastered, particularly as they often deal with private and sensitive information. The ability to talk about tax laws that can be complicated and convoluted, in a way that clients can understand, is essential.
Word processing, managing files and records, stenography and transcription, and designing forms are all administrative and clerical procedures that a qualified tax preparer should have mastered.
Knowledge of law and government:
As we all know, laws and regulations relating to taxes can be complex and long winded, and are often prone to change, meaning that for a tax preparer to be any good at his profession, he or she must keep up to date with laws and government goings on at all times.
Attention to detail:
Tax regulations can easily be misinterpreted, and mistakes when calculating taxes can be made, too, so it’s imperative that a good tax preparer takes the time to enter numbers correctly and make sense of tax regulations. The tiniest of errors can cost clients dearly, not to mention get them into hot water with the IRS, so tax preparers should thoroughly check their work before submitting returns, and eliminate any errors or inaccuracies.
Numbers naturally play a critical role in tax preparation, so if your tax preparer doesn’t have a good head for numbers and mathematics, you should probably look elsewhere. The basics of arithmetic must all be covered, and good knowledge of algebra is often required.
So, as you can see from the list above, a tax preparer worth their salt can be expected to possess a wide range of skills and have an extensive knowledge base. If your tax preparer falls short in any of the above areas, then it might be time to start looking elsewhere for someone to prepare your taxes.