Business Trends

Getting Started in Tax Preparation

Despite rules designed to regulate the tax preparation profession, the benefits haven’t been lost on thousands who enter the profession

Despite the restrictions and headaches of Circular 230 and other rules designed to regulate the tax preparation profession, the benefits of a career in tax preparation haven’t been lost on the tens of thousands who enter the profession every year. And while some of them fall by the wayside, others find tax preparation a rewarding and enjoyable occupation.

Most newly minted CPAs, Enrolled Agents, Registered Tax Preparation Preparers or attorneys who intend to make tax preparation their business have questions about how to get started: what form the business should take, whether and how to expand, whether to buy into a franchise opportunity, how to market, how to charge, and what to pay employee-preparers, among other issues.

Part of the dilemma on whether to tax preparation franchise or not to franchise depends on how much of initial investment you want to make. When I first started, I looked at a franchise, but I decided against it because it was just too expensive and you had to pay the full price. The franchisor wasn’t willing to give a multi-site reduced agreement, and since it was a new franchisor with relatively no name recognition at the time, I decided to do it on my own.

The pros of a franchise are that there is an existing, proven system. They have a system that’s been proven to work, assuming the operator is competent and is able to implement the system. The other key advantage is that, with an existing established franchise, there should be name recognition, and there is probably advertising to an extent that would not be feasible for the sole operator.”

The cons of a tax preparation franchise include the initial fee, which can be expensive, and the ongoing royalties, as well as geographic restrictions that may make it difficult to expand, he said.


New preparers, especially those going into business for themselves, to join one of the professional organizations such as the National Association of Tax Professionals, the National Society of Accountants, the National Association of Enrolled Agents or the National Society of Tax Professionals, as well, of course, as the American Society of CPAs if the preparer is a CPA.


Malpractice, professional liability, or errors and omissions insurance is vital. Just because I never had a claim against me in 45 years doesn’t mean it was not a good investment. I’ve had auto insurance all my life and I’ve never run into a tree, but I don’t regret it. It’s a way to protect yourself from the worst that could happen, and with taxes, it’s not a question of if it will happen, it’s when.

For the expanding tax preparation office, it would be worthwhile to closely examine non-compete agreements who covers recruiting, hiring and training preparers, as well as site selection and lease negotiations, in the Tax Office Operations Manual available from his Income Tax School.

We only prohibit former employees from serving clients they served while employed by us. For preparers, the typical time period is two years and the distance is usually 25 miles from the former employer’s offices. Equally important as having a non-compete clause is to include provisions in your tax preparer employment agreement that serve indefinitely to prohibit solicitation of clients and employees, and to require confidentiality of client and company information.”

For someone getting started in the tax preparation business, or even for the seasoned professional, it is critical that knowledge and ability limitations be recognized. Tax professionals should not accept engagements where their knowledge or skill is limited. A great Form 1040 preparer should not accept an engagement to prepare a corporate or partnership return without the knowledge and skill to do so. We must realize that while it is our taxpayer’s return of income, it is indeed our tax return because we put our names on them, giving legitimacy to the return.

By Gustavo Viera

Gustavo A Viera, CPA, is the managing partner in Gustavo A Viera, PA, CPA. His experience spans more than 25 years. His public accounting experience includes a senior audit manager at PriceWaterHouseCoopers with a focus in the healthcare industry, and Chief Financial Officer of Hewlett Packard Latin America and Telefonica of Spain. Gus also writes a blog twice a week that addresses issues his clients have at He has also taught in the SBA program in Miami FL, and is admitted to practice in the State of Florida licensed Certified Public Accountant. Gus welcomes questions and he can be reached at Gustavo A Viera, PA, CPA, One Alhambra Plaza Floor PH Coral Gables FL 33134 (786) 250-4450.