The Canadian tax season will soon be here, and in an effort to gain your business some corporate tax preparers will promise you fast turn-around times and big refunds by professionals. Some will even offer guarantees understanding fully that in most cases they can always shift liability back to you the client and escape you.
Have you investigated the qualifications the so called pros claim to have? The turnover rate at most of these companies is so high that each year over half their employees are brand new with many learning about taxes for the very first time. Once employed, most have just a rudimentary understanding of Canada’s corporate tax code since the focus of their employers is teaching them data input and speed. Read on to learn about things you should consider when choosing corporate tax preparation services.
5 Things to Consider When Choosing Your Corporation Tax Preparation Service Provider
When choosing a corporate tax preparer, there are obvious things to look for, such as how long they have been operating, if they are reputable, and whether they have many referrals. However, there are some specific things you should look for and consider including:
1.Year Round Availability & Accessibility
Over 40 percent of tax returns filed electronically require some follow-up action. Ensure that you are able to access the tax preparer after the return has been filed. Large firms do provide follow-up assistance, but this is usually done by clerks with little knowledge of your tax situation once tax season is over. A tax preparer who is available and accessible year round can provide more personal and knowledgeable service.
2.Licensed and Insured
The corporate tax preparer should have a valid business number, license, and E-file number for the purpose of filing returns electronically with the CRA. However, you should remember that anyone can have a business number and prepare taxes. You should thus ensure that the tax preparer is insured. If you are penalized due to a mistake or negligence on the part of the preparer, the insurer will pay for it. Your return should also include the name, number, and E-file number of the tax preparer.
3.Investigating Any Questionable History
It is important to investigate whether your corporate tax preparer has any questionable history with member organizations. Member websites often publish details of any disciplinary measures taken against a particular prepare. It is important not to deal with tax preparers that are not members of overseeing bodies. Should the preparer make an error on your tax return that would usually lead to disciplinary action from the member overseeing body, you will have no recourse.
4.Check for Credentials
The tax preparer should ideally be either a Tax Attorney, a Certified General Accountant, or a Certified Financial Planner. The professionals listed here know what questions to ask their clients and how to “probe” to find out relevant information you may not have considered.
Tax professionals also know how to “integrate” your tax situations with other aspects of your financial life to advise you and help you plan your finances better for the best outcome possible. Ensure that you check whether the tax preparation servicer is affiliated with a reputable professional organization that holds members accountable to a code of ethics and either provides or encourages them to pursue continuing education.
5.Being Cautious of Tax Preparers That Promise High Returns
Tax preparers sometimes create falsified information to get you a higher tax refund that can get your audited by the CRA. If you are not knowledgeable of the corporate tax code in Canada, it is easy for the tax preparer to do this without you realizing. The preparer may even direct the refund towards themselves, so ensure that you receive the refund directly from the government and not the prepare.
Avoid tax preparers that manipulate figures or ask you to sign blank returns. You should also check to ensure that the preparer’s service fees are not based on a percentage of the refund. Review your return and ask the tax preparer questions. Don’t sign your return blindly. Never forget that you are legally responsible for the tax return irrespective of who actually prepares it.
The Bottom Line
Picking the right corporate tax preparation services provider in Canada is never easy since there are many looking to defraud you.
Ensure that the tax preparer is accessible and available year round to resolve any issues arising from electronically filed returns. Check whether the preparer has a questionable history and be cautious of those that promise high returns. Don’t forget to check the credentials as well as the license and insurance status of the tax preparer to ensure that you only work with reputable businesses.
If you follow the 5 tips provided here, you will find the most suitable corporate tax preparer that will not get you in trouble with the authorities.