When you look for someone to prepare your U.S. tax return, especially someone who works in Japanese, you run into a mix of titles: tax preparer, EA, CPA. Which one should you choose?
This article explains the difference between the main credentials, who can represent you before the IRS, how to check a preparer’s credentials, what to ask if you have ties to Japan, and the red flags the IRS warns about.
In the U.S., anyone with a PTIN can prepare returns
Unlike Japan, the U.S. does not require a professional license to prepare tax returns for pay. Anyone who obtains an IRS Preparer Tax Identification Number (PTIN) can do it, so knowledge and accountability vary widely among people who call themselves tax preparers.
Credentials and representation rights
Whether someone can deal with the IRS on your behalf, for example in an audit or when you receive a notice, depends on their credential.
| Credential | Licensed by | Representation before the IRS |
|---|---|---|
| Enrolled Agent (EA) | IRS (federal) | Unlimited, including audits, collections and appeals |
| CPA | State boards | Unlimited |
| Attorney | State courts / bar | Unlimited |
| Annual Filing Season Program participant | Voluntary IRS program | Limited: only returns they prepared, and only certain matters |
| PTIN only, no credential | — | None (since 2016) |
Enrolled Agents are licensed directly by the IRS. They pass a comprehensive three-part exam and complete 72 hours of continuing education every three years, and because the license is federal they can serve clients in every state. A CPA license covers accounting and auditing broadly; some CPAs specialize in tax, others in audit.
Check credentials on the IRS website
The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications lets you look up EAs, CPAs, attorneys and AFSP participants by name and location. It’s worth a quick check before you hire someone.
What to ask if you have ties to Japan
- Experience with the U.S.–Japan tax treaty and the foreign tax credit (Form 1116)
- Reporting of Japanese bank and brokerage accounts (FBAR and Form 8938)
- Japanese mutual funds that may be PFICs (Form 8621)
- Dual-status returns for the year you moved to or left the U.S.
- Whether you can ask questions in Japanese and get clear explanations
- Whether they’re reachable after filing season, in case an IRS notice arrives
Red flags the IRS warns about
- Fees based on a percentage of your refund
- Refusing to sign the return or include their PTIN (a “ghost preparer”)
- Asking to have your refund deposited into their bank account
- Asking you to sign a blank or incomplete return
- Promising an unusually large refund
You are ultimately responsible for what’s on your return, so always review it before you sign.
Then compare price and service
Once you’ve checked credentials and experience, compare price and responsiveness. See How much does tax return preparation cost? for typical fees and How to switch tax preparers for the steps to move your records.
At CLT NY INC., your return is prepared by Takuya Yukimoto, an IRS Enrolled Agent, in English or Japanese. If you’re switching from another preparer, our switch campaign takes 50% off last year’s preparation fee (up to $500 off, first year only).
Sources: IRS, “Understanding tax return preparer credentials and qualifications”; IRS, “Quick tips for picking a tax pro”. This article provides general information and is not individual tax advice.
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