Here are some common red flags to look out for when hiring a crypto tax firm;
1. Lack of verifiable credentials or specialization
An accountant or firm must have vetted credentials. These credentials must also be current (where applicable) and clear. Unverifiable claims or obscure certification documentation are a major red flag.
2. Unproven expertise in crypto tax laws
Crypto tax laws are significantly different from traditional tax laws and are regularly changing. While an accountant may be experienced in traditional tax laws, they may have little or no exposure to the crypto tax laws. Therefore, if the accountant you wish to hire has now proven record of handling crypto-related tax accounting, this is a caveat.
3. Unrealistic or opaque pricing
Unrealistically low service charge is also a common red flag. Review the fee range of other accountants or firms in the same category and compare it with the one provided by the one you wish to hire. If the charges aren’t clear, request complete clarity and consider rejection if these demands are not met satisfactorily.
4. Upfront demands for payment in cryptocurrency, cash without receipts, or fees tied to the refund size.
Professional tax accountants are expected to provide a clear pricing structure and not request payment until they understand the task. Payments should also be made through trackable means; therefore, a request for payment in crypto is a red flag. If you are making a cash payment, ensure it is documented with a receipt; requests for cash payments without a receipt are also a red flag.
5. Requests for full access to your exchange logins, wallets, or private keys
Tax accountants do not need direct access to your crypto wallets to perform their duties. Never provide your wallet details to a tax professional, and consider a request for wallet keys a clear rejection.
6. Poor or no reviews or references
Referrals are among the best ways to hire a good tax accountant with a proven track record, as reviews from past clients help you confirm if an accountant fits your needs. When an accountant or firm has no trustworthy reviews or outright poor ones, this is a red flag.
7. Anonymous online presence
While this is not a direct red flag, it should raise more questions and attract more in-depth reviews. Individual tax accounts are not always expected to be active online; however, this is not the case for tax firms. Even for individuals, there should be significant traceability online. Where this is not available, perform additional research and consider hiring a different professional.
Source: https://coingape.com/top-crypto-tax-accountants-and-firms/
