Is your tax preparer a data entry clerk or a CPA tax law expert that adds value?

Question

Data entry clerks - likely to miss deductions, overlook credits, miss carryforwards, make mistakes on tax law limitations

CPA - get it right, reduces errors, and helps you in building your wealth through tax savings

What are your thoughts? What factors did you consider for your decision? Aren't all tax preparers the same?

Aaron Zimmerman · Answer

I would say that everyone is prone to making mistakes. CPAs generally have more knowledge about general accounting but it is ultimately up to the individual person to take it a step farther to get more specialized. While it's nice that being a CPA provides instant credibility, credentials can only get someone so far. Like @Natalie Kolodij said, there's plenty of EAs that are better than CPAs at tax.

Charles Perkins · Answer

This is exactly what I mean.  There are CPAs that are extremely good at what they do. They don't rely on the meager information obtained from continuing education classes, but instead they research more on their own.

The CPA exam is a start, but the education obtained from experience, asking questions, digger deeper, consulting with other professionals, as well as other sources is valuable.  I always strive to be better.

I've met many know-it-alls, complacent people and those that strive for excellence.  I choose always to be learning.  Tax law is complex and is actually a small part of the CPA exam.  The CPA exam proves someone is capable of doing well but these people are yet green and like a young plant.

Natalie Kolodij · Answer

I think what Charles is getting at is a very important idea that there is always more to learn and to me maintaining that mindset and humility makes someone much better in their field.

There's a saying around recognizing the difference of someone with ten years of experience with someone who has one year of experience they've repeated ten times.

And unfortunately that's very true with many professionals; after those early years of learning they stop growing, learning, developing, become set in their ways, etc.

Someone hanging their hat on having done something for 20 years, or having passed a very hard exam 20 years ago doesn't mean they're an expert. They may be an expert; but those 2 facts aren't what can/will determine that.

I worked for a CPA firm where the partners with 20+years of experience each hadn't taken a CPE class in years. They made staff sit through webinars to get the CE credits needed to maintain their licenses. They have a CPA license, 20+ years of experience and their name on the door but they stopped being an expert when they decided what they knew was enough and they were done learning or staying up to date on tax law.

Charles Perkins · Answer

I'm a retired CPA, have a master's in taxation and have over 30 years experience.  I've met some very highly specialized experts in low income tax credits, corporate accounting and tax, as well as tax resolution.  I performed audit work in low income housing.  My income tax experience is primarily in tax resolution and real estate accounting.

Along the way, I have met many fellow tax preparers in office settings, continuing education classes, and other meetings.  I've also reviewed work done by both CPAs and tax preparers in large and small firms.

I'm constantly learning new income tax strategies, reviewing my understanding of tax legislation and opportunities that are created with new legislation.  I would never claim myself an expert.

Natalie Kolodij · Answer

Maybe we could stop using CPA and tax expert interchangeably? I have tax clients who are CPAs, I amend many returns prepared by CPAs, Many CPA's don't do anything related to tax. Enrolled Agents are licensed and tax specialized; and some uncredentialed preparers can run circles around some CPAs or EAs. I absolutely agree there is a huge difference between someone who is a data entry "preparer" and someone who is a skilled technical tax professional. That doesn't break down to "data entry" vs. "CPA" though.

Brian Dela Cruz · Answer

If not you, then who? If you're not an expert with a retired CPA license, a Master's in taxation and 30 years of experience, then who is? If not now, then when? If you're not an expert by now, then when would you be? What would it take for you to become an expert?

Brian Dela Cruz · Answer

@Charles PerkinsAlso, as a CPA, while I can’t claim to be infallible, I’ve made very few mistakes over the years. I always double-check my work—and ensure that those working for me are thoroughly trained to do the same—especially in areas where high risks or significant consequences are at stake, such as in matters of high materiality. I almost always invest extra time verifying these critical areas, which is key to maintaining the high standards our clients expect. That said, delivering this level of quality requires a significant investment of time and attention on every engagement, which is why I simply can’t charge low rates.

Brian Dela Cruz · Answer

@Charles Perkins

I appreciate your perspective. For me, taking the CPA exam was a transformative experience—it taught me more than the 30+ credit hours I spent in college level courses on accounting, tax, audit, and business law. The exam not only deepened my understanding of the intricate details but also helped me see the big picture of how our financial system works. It sharpened my tax research skills, which have proven critical when I began handling accounting and tax matters for businesses and real estate investors.

Moreover, earning my CPA was just one milestone in my ongoing learning journey. I went on to acquire several other credentials both before and after becoming a CPA, driven by my desire to master every facet of the profession. And while my professional growth is important to me, I also balance the demands of a busy family life with my wife and four young kids.

Looking forward to more insightful discussions like this.

Brian Dela Cruz · Answer

@Natalie KolodijIn my 20+ years of experience, I have never met an uncredentialed tax preparer who could 'run circles around' CPAs and EAs when it comes to tax laws and compliance. If such tax law prodigies exist, I’d love to meet them. From my experience, those who are truly skilled in tax typically learned from a CPA or another highly credentialed professional, if they lack formal education and credentialing in tax. But that raises an interesting question—how would you even go about finding a good uncredentialed expert?

Also, you have to wonder—if they’re so skilled, why didn’t they at least pursue an EA or CPA credential? Did they believe there was nothing more to learn? Or were they simply not motivated or committed enough to take that step?

Is your tax preparer a data entry clerk or a CPA tax law expert that adds value?

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