What is the difference between and Licensed Tax Consultant (LTC) and CPA?
LTCs specialize specifically in the preparation and planning of individual and small business taxes. LTCs are required to have a minimum 700 hours of preparing tax returns, annual on-going training requirements, be held accountable for accurate returns and complete a comprehensive 5 hour examintaion. A CPA or Attorney may specialize in taxes, but most CPAs audit financial statements, perform compliance audits, or offering advisory services to organizations or corporations and usually tax preparation is only a small part of what they do for their clients. In choosing a tax professional you don't need to buy services that exceed your current tax needs. Your first concern is selecting someone knowledgeable of the taxes to which you are subject.
What is being said about tax preparation professionals...
Paid preparers are a critical part of the nation’s tax administration system because of the wide variety of services they offer and their unique relationship with taxpayers. Paid preparers may combine several taxpayer services, including help understanding tax obligations, answering tax law questions, and providing tax forms and publications, return preparation, and electronic filing.
Furthermore, the odds that a return filed by an Oregon paid preparer was accurate were about 72 percent higher than the odds for a comparable return filed by a paid preparer in the rest of the country.
Additionally, the United States Government Accountability Office (GAO) conducted a study which resulted in a report to Congress titled “Paid Return Preparers: In a Limited Study, Chain Preparers Made Serious Errors.” In the study, undercover agents with two different tax scenarios were sent to a total of 19 offices of 5 “fast-food” commercial tax chains, including H+R Block, in a metropolitan area. In only 2 instances was the correct refund calculated, but all 19 returns contained errors.
[GAO-08-781, Aug. 2008]
“In 2010, the IRS estimated that the average taxpayer needed 21.4 hours to do his or her 2009 tax return, 31.9 hours if a Schedule C for business or a Schedule E for rental properties was filed. Because the tax code is so complicated, more than 60 percent of Americans have professionals do their tax returns. Tax law has had major changes in 44 of the past 47 years. Several tax law changes have been passed in 2010.”