Frequently Asked Questions
1What is an Enrolled Agent (EA)?
The Enrolled Agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the Treasury Department. This congressional regulation made Enrolled Agents the first to be appointed as representatives, with CPAs and Attorneys being given this right later. An Enrolled Agent is an individual who has demonstrated technical competence in the field of taxation. The term “Enrolled“ means the individual is licensed by the federal government. The term “Agent“ means the individual is authorized to appear in place of the taxpayer at the Internal Revenue Service. Only Enrolled Agents (EAs), Attorneys, and Certified Public Accountants (CPAs) may represent taxpayers before the IRS at all administrative levels. An EA’s expertise in the continually changing field of tax law enables them to effectively represent taxpayers audited by the IRS. EAs are required to complete 72 hours of continuing professional education, reported every three years, to maintain their status as an EA. Only the Enrolled Agent is required to demonstrate to the Internal Revenue Service their competence in matters of taxation before they may represent a taxpayer before the IRS. Unlike Attorneys and CPAs, who may or may not choose to specialize in taxes, all EAs specialize in taxation. EAs are the only taxpayer representatives who receive their right to practice from the United States government and can practice in all 50 states. (CPAs and Attorneys are licensed by the states and can practice only in the states in which they are licensed.)
2What information does Baity & Assoc. need to prepare my tax return?
A general listing of items needed is located in the Client Documents section of the web site. In some circumstances, you may need to consult one of our associates for further review.
3Why do I have to fill out all of this paperwork if nothing has changed?
We update all client files every three years. Although things such as addresses and birthdates may not have changed, people do routinely change employment, cell phone numbers and e-mail addresses. There may also be changes to marital and dependent status. The updates ensure that we have the most current information on file when reporting to the IRS.
4How long will it take to prepare my tax return?
There is no specific answer to this. During Tax Season, we offer face-to-face appointments during which your return will be prepared while you are here (usually about one hour). We also offer drop-off or mail-in service; these returns are processed on a first-come, first-serve basis, and turnaround time is usually 2-3 days (given that all information required has been received). The later it is during Tax Season, the more time it takes for preparation as the drop-off and mail-in service numbers increase.
5How does Baity & Assoc. ensure that all of my information is kept safe and confidential?
All employees are thoroughly trained on confidentiality procedures. All files are maintained in house – no client information leaves the office. Files are also maintained in an Electronic File Cabinet with very stringent firewall protection. We maintain all physical file information for a three-year period; then it is destroyed by an on-site commercial cross-cut shredding company. The shredding is always witnessed by an employee of Baity & Assoc. Tax and Financial Services, Inc.
6How long do I need to save my back-up documents in case I am audited?
The IRS recommends that you save any files related to your income tax return for 7 years.
7How do I avoid being audited?
There’s no sure way to avoid a tax audit but keeping good books and records is a definite start. Most audited tax returns are selected for review either because the filer is part of a target group or because a computer program selects the return. The computer system selects many returns randomly, but there are red flags that will draw the Internal Revenue Service’s attention. Having your return prepared by a professional tax preparer helps you to navigate around these red flags.
8I have received a letter from the IRS, what do I do?
First of all, don’t panic. Just because you receive a letter from the IRS, it does not indicate that an audit is in process. There are many types of correspondence from the IRS, so bring your IRS letter to Baity & Assoc. so that we can research what the IRS is after. If it is an audit, Baity & Assoc. is experienced with the IRS in regards to audits and can help you through the audit process.
9How can outsourcing my bookkeeping department help my business?
Successful outsourcing relationships enable business owners/CEOs to focus on their business’ core competencies, eliminating the daily tactical to-do lists (working in the business) that keeps them from spending time on the big picture and strategic initiatives (working on the business). Businesses find that they save money, improve quality of work, and free up resources when they outsource the right functions.
10How can QuickBooks® training help my business?
Business owners who keep up-to-date with their bookkeeping and who understand their financial reports become more confident in their decision making and reduce their stress levels. They know precisely what they need to do and when they need to do it to make their business grow. Being able to access accurate information quickly allows them to make business decisions in an effective, efficient manner and can prevent many potential cash flow crises.Baity & Assoc. can provide QuickBooks® training at either your location or ours, whichever works best for your situation.