How can an American expatriate correctly choose US expatriate tax services? American expats move overseas and they do not know how to choose an expat tax specialist that will help them prepare an overseas tax return.
We have helped clients in over 75 countries and this issue was raised many times. Many American expats admitted that they did not understand a difference between a CPA and EA (Enrolled Agent). Moreover, they could not find a specialist that provides US expatriate tax services and who understand the international tax system of foreign countries.
Expatriate Tax Services and American Expat Stories
These are some of the situations that we came across.
One of the clients from Germany mentioned that she felt like her expatriate tax return was pushed through a mill to a person without experience when she used expatriate tax services of a medium-sized local CPA firm in her state. After reviewing her prior year tax return we found a lot of mistakes.
Another client from France found that his overseas tax return was actually outsourced to a low-cost preparation company in India. His tax preparer did not return his emails when the client received a letter from the IRS.
One client in Australia used the expatriate tax services of a large-chain tax preparation company. The preparer did not care about the client’s interests and chose a short-cut approach. The client paid US expat taxes and penalty. After we reviewed the return, we filed an amended return and identified that the taxpayer did not owe any tax.
One more client from Sweden used an online company that provides only US expatriate tax services. However, the company did not file the correct IRS tax forms. We advised to file an amended return and he received a substantial refund.
These are just some of the situations that we encountered in our practice.
So how can American expatriate find a reputable company that provides US expatriate tax services?
1. It is essential to understand differences between a CPA and EA who prepares your overseas tax return.
Did you notice that many overseas tax preparers are enrolled agents? The answer is that it is quite easy to become an enrolled agent. In order to become an enrolled agent, the person has to pass the Special Enrollment Examination, which consists of three parts. In order to become a CPA, the person must have a bachelor’s degree and extensive experience, pass rigorous exams and maintain continuing education.
2. CPA is essential for American expats who have their own businesses in foreign countries.
CPA can provide a wide range of other US expatriate tax services:
- Consultations before making investment decisions like buying a house, investing in foreign mutual funds and setting up a business
- Preparation of quarterly estimated payments and returns for self-employed American expats
- Representation in case of an audit or even simple IRS notices
- Bookkeeping and general accounting services
- Incorporation of a business
- Estate planning, financial planning and corporate finance
- Help with state, local, sales, gift, and estate taxes
- Update on the current law changes. The last point is the most important for American expats because the IRS introduces legislation changes affecting Americans living abroad on a regular basis like FATCA, FBAR, PFIC and other expat tax issues.
3. Choose a smaller firm for American expats.
Smaller firms will provide you with a personalized service so you do not feel like a pawn. Typically, from large companies American expats can expect reasonable rates for simple jobs, and “big name” behind it. However, a taxpayer does not develop a personal relationship with a tax preparer. Moreover, most of the time this tax preparer would not be even at the firm next year. Additionally, the quality of service might be an issue too. From private expat tax practitioners, American expats can expect individual attention, flexibility, and personal approach.
4. Save money on US expat tax preparation.
We have many clients from Big 4 accounting firms. They paid thousand of dollars to have their overseas tax return done without getting any support or advice when they received several IRS letters.
5. Work with a person who actually cares about you and your tax situation.
At Artio Partners we have helped clients from over 75 countries. If you need help with your expatriate tax return, please choose a company that specializes in providing US expatriate tax services. International tax experts at Artio Partners will be pleased to help with US expat taxes and other overseas tax issues.