The term “tax agent” can refer to two different types of tax professionals. It is, in one sense, a person who represents the government in investigations and collection proceedings to ensure that citizens and businesses pay their taxes. The second definition refers to someone who prepares taxes on behalf of others, providing professional assistance to individuals and businesses who are unable or unwilling to do so on their own. Rather than government employees, this article focuses on professional tax preparers.
Taxation is a complicated subject, and in many countries, the government allows tax preparers to charge a fee for their services, which usually includes handling the submission process as well. Tax agents must be certified by the government agency in charge of taxation in most places. This is to prevent people posing as tax agents from either not properly preparing taxes because they don’t know how, or using their access to personal financial information for fraudulent purposes. People looking for a tax agent can inquire about the person’s qualifications, including whether or not they have been granted permission to practice by the government.
Tax agents include certified public accountants, tax attorneys, and certain other types of professionals. Many are members of professional organizations that have their own certification programs and may refer to themselves as “tax practitioners” or “tax preparers.” People are only permitted to use a professional title if they are properly qualified in some cases, and they can report fraudulent use of professional credentials to the parent organization.
The tax agent will ask clients to gather all of their financial records, including income and expense records. Many tax professionals work with their clients to identify areas where they can save money on their returns and will ask a series of questions to see if they qualify for certain tax credits, deductions, and other benefits. This can be a valuable service for people who are unfamiliar with tax law, as they may learn about numerous savings opportunities, such as tuition deductions, certain housing expenses, and other matters, depending on the country and the tax year.
Once the tax agent is confident that she has a complete picture of the client’s finances, she can use this information to prepare a tax return. She verifies the accuracy of the information and calculates the total tax liability as well as the tax or refund due. Most people will prepare both federal and state taxes at the same time, duplicating data on both sets of forms. When the forms are complete, the tax agent has the client sign them and submits them, which is often done electronically to save time.