Sunday, April 9, 2017

Do You Have the RIGHT Tax Advisor?

It can be stressful trying to find a good, proactive tax advisor who is reputable, trustworthy, and will bring a ton of value to your working relationship.

There are cases where someone has used the same tax professional for a long time and they are reluctant to change. Usually the client and tax advisor have built a great personal relationship over many years of working together.

Although we all want to have strong personal relationships with business colleagues, at some point we have to view these relationships objectively as well. After all, it is your money at stake here.

Whether you have used the same tax pro for years or you need to develop a new relationship, use this question to objectively assess the value of your current tax advisor:

When was the last time your tax pro came to you with an idea to save you money?

If the answer is never, or hardly ever, then you probably need to reassess this relationship.

Here is a list of questions you need to ask about any tax professional before hiring them.

1. What role will the tax advisor play on my financial team?

Will your advisor interact with the other members of your team (attorney, financial planner, etc.) to make sure everything in your financial plan is working smoothly?

2. How much experience does the tax advisor have delivering the kind of results you are looking for?

Ask the tax advisor to share some success stories from other clients they have worked with. Most tax advisors will be able to share stories, testimonials, or even references with you. Make sure you check them out.

Don’t be afraid to ask about specific strategies the advisor has used. You want the advisor to respond with answers like “we educated the client on which costs were deductible” or “we restructured this client’s business to take advantage of lower tax rates,” etc.

What you don’t want to hear is evidence that the advisor has used aggressive strategies that would cause red flags with the IRS, or strategies that are just plain illegal. Listen for words like planned, restructured, educated, and documented in the advisor’s answers—these are legitimate.

3. What experience does the tax advisor have with your issues?

Does the advisor have knowledge about your industry? Do they work with anyone inside your industry right now? Do they know about any trends or news that relate to your business? What can be done to either profit from or protect you against those trends?

You want to be working with an advisor who understands your business and can help you with real issues that you are facing. If you have to educate your tax professional about how your business routinely operates, it is time to move on. A true professional will refer you to somebody else if your business is not their specialty.

4. What does the advisor do for their clients year-round?

Business (and life) happens year-round, not just at tax time. You need to be able to have access to your tax advisor all year long so if a situation comes up and you need guidance, you can get advice before the transaction or event happens.

If your tax pro only does taxes between January and April and takes the rest of the year off, that should be a red flag to you. You want somebody who lives and breathes the tax code and can apply it to your situation. You also want an advisor that will stay in contact with you during the year and alert you to any tax saving opportunities that may arise.

5. What level of responsibility will they take for your tax return?

Finally, you want an advisor that will stand behind their work. If problems come up with your tax return, your advisor should be able to address them. If you get audited, your advisor should be able to help you through the audit process.

The biggest red flag up front is to have a paid tax advisor who doesn’t sign your tax return. They are basically telling you they won’t take any responsibility for any items on your return.


Right now is the best time to perform this objective assessment since you most likely just had your taxes done (or will shortly). Maybe this article has confirmed that you are receiving great service from your current advisor. But if not, now is the time to upgrade this extremely important part of your financial team before you spend any more money in taxes than you should!

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