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I have some nasty tax problems caused by my Certified Public Accountant (CPA; who I have fired) and my own lack of oversight. I think I need to file a 1040-X and go over thousands of transactions from previous years.

I am wondering who I should hire to help with this. A financial advisor? A better CPA? Ideally, I want someone who can help dig me out of this hole and help with figuring out how to carve up my assets and income in the best possible way.

Who generally deals with these sorts of problems?

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    What's the problem? You don't need a CPA to amend a return if you know what you are changing.
    – littleadv
    Oct 18, 2023 at 17:37
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    I just want someone who knows what they are doing to help go through these transactions and ideally give advice on how to structure finances going forward.
    – Wapiti
    Oct 18, 2023 at 17:41
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    I'm no law expert, but can't you legally go after the bad CPA if they were totally incompetent? CPAs are licensed with the IRS. At the very least they could be liable for any tax penalties caused by their errors.
    – Nosjack
    Oct 18, 2023 at 18:32
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    @Nosjack CPAs are regulated by states, and here the OP doesn't provide any details, but "my own lack of oversight" suggests that it's not just the CPA who's at fault.
    – littleadv
    Oct 19, 2023 at 0:10
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    Individuals generally don't have thousands of tax-relevant transactions by themselves, you must have some sort of business or investment activity. Anybody you hire should be knowledgeable about those specific activities, for example, knowledgeable about rental properties, employee taxation, stock trading, etc.
    – user71659
    Oct 19, 2023 at 3:04

1 Answer 1

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When it comes to tax advice/planning - the only people legally allowed to provide that as a paid service in the United States are:

  • Tax preparers - regulated by states and registered with the IRS, tax preparers are only allowed to prepare your return.
  • EAs (Enrolled Agents) - EA is a license regulated by the IRS, and EAs are solely tax practitioners. They can provide tax advice, tax planning, prepare returns, and represent their clients before the tax authorities (IRS and State).
  • CPAs (Certified Public Accountants) - CPAs are regulated by each state and must be licensed in the state where they work. They can act as tax practitioners (and their license authority in that regard is the same as EAs), but can also do other things (assurance/compilations/certifications/etc) which are usually not relevant to individuals.
  • Attorneys - as CPAs, attorneys are also licensed by each state and must be licensed (admitted to the bar) in the jurisdiction where they work. They can do all the same things as EAs and CPAs with regards to taxes, and in addition represent their clients in courts where they're admitted. Tax attorneys are usually needed for more complex cases where you expect the courts to become involved to resolve a controversy, or where there's a risk of criminal exposure.

For financial advice you should talk to a person you trust to give you that advice. There's no legal requirement to have any particular license, but there are requirements when acting as fiduciary, agent, representative or sales person. Financial advisers who are not EAs/CPAs/Attorneys are not legally allowed to provide tax advice.

So you may end up with two different providers: one would be a licensed tax practitioner (EA/CPA/Attorney), and another would be a financial adviser or planner.

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