How to Become a Tax Consultant

Tax consultants provide tax-related guidance to organizations and individuals. They offer clients advice on tax savings and filing strategies and help them develop taxation plans, strategies, and processes.

A tax consultant's responsibilities can overlap with those of tax preparers, tax managers, and tax accountants, but tax advisors specialize in guiding clients through complex tax situations. Their thorough understanding of local, state, and federal tax laws and regulations helps them navigate compliance and legal matters at various levels.

Explore how to become a tax consultant and what benefits come with the field.

Steps to a Taxation Consultant Career

The Direct Path

1. Earn a bachelor's degree in accounting: A four-year bachelor's degree in accounting or a related discipline can help you qualify for most positions in the field.
2. Gain relevant practical experience: Build up your experience through internships and entry-level accounting positions. Many employers want tax advisors to have multiple years of tax-related experience.
3. Request an Internal Revenue Service (IRS) preparer tax identification number (PTIN): The PTIN allows you to prepare federal tax returns. This is typically the minimum requirement for taxation consultants.
4. Apply for tax consulting jobs: With a degree, relevant experience, and the ability to prepare taxes, you may pursue tax planning and consulting jobs.

The Advanced Path

1. Earn a bachelor's degree in accounting.
2. Earn a master's degree in accounting: A master's degree provides you with advanced accounting expertise and can meet the educational requirements for several postgraduate certifications and licensure.
3. Gain relevant practice experience.
4. Become an enrolled agent: Complete the Special Enrollment Examination (SEE), apply for enrollment with the IRS, and pass the suitability check to gain eligibility to represent taxpayers.
5. Become a certified public accountant (CPA): Complete the CPA exam and the experience requirements for CPA licensure in your state. CPA licensure can also qualify you to represent taxpayers in front of the IRS.
6. Maintain your credentials: Complete the continuing education requirements to maintain and renew your credential.
7. Apply for tax consulting jobs.

Required Tax Advisor Education

Tax advisors can choose from several educational pathways to the profession. While the field has no mandatory requirements in general, many employers prefer candidates with at least some formal education in accounting.

Some of the most useful accounting training comes from undergraduate accounting programs, though business administration programs can also jumpstart your career. In either program, a concentration in taxation may be the ideal choice.

A graduate degree in accounting or business administration can improve your employment opportunities, particularly if you specialize in taxation or tax law. It might also boost your earning potential, as these degrees can lead to leadership positions.

Required Credentials for Tax Consultants

The credentials required for taxation consultants depend on your employer and role. In general, the career has no mandatory certification or licensure requirements. However, if you plan to prepare and submit tax returns for your clients or employer, you need an IRS PTIN, which requires you to pass a suitability test. To represent clients in front of the IRS, you need an enrolled agent status or a CPA licensure.

To earn enrolled agent status, you need to pass the three-part IRS exam called the SEE. You then need to maintain your status with 72 hours of continuing education every three years.

For CPA licensure, the requirements vary by state, but you typically need a bachelor's degree and 150 postsecondary credits with a focus on accounting coursework. CPAs also need to maintain and renew their licensure through continuing education, though the specifics depend on the state.

Optional Certifications and Degrees

Technically, every accounting degree and accounting certification is optional in a field with no mandatory minimum requirements. However, tax consultants can enhance their qualifications with the accredited tax advisor (ATA) credential.

Offered by the Accreditation Council for Accountancy and Taxation (ACAT), the ATA recognizes tax professionals who have a solid grasp of the most complex tax planning and consulting issues and practices.

The ATA requires you to pass the three-hour, 100-question exam. You will need a minimum of three years of tax-related experience to sit for the exam. Maintaining the credential requires at least 30 hours of continuing education every year, including 28 hours in taxation and two hours in ethics.

Required Experience for a Tax Consultant

The tax advisor profession has no strict experience requirements, but many employers value time spent on the job. You can gain relevant experience in an entry-level tax preparer or general accounting role. These positions can give you practical familiarity with tax laws and complex filings.

In some cases, education can take the place of experience, particularly a graduate degree in a relevant discipline. A master's in accounting, for example, can prepare you for many situations and allow you to gain experience in accounting internships and practicums.

Should I Become a Tax Advisor?

Tax advisor careers offer a strong occupational outlook and financial reward. Yet, they can also prove challenging and demanding, especially during tax season.

Here are some of the biggest pros and cons of being a tax advisor.

Searching for Tax Consultant Jobs

After you have the credentials and experience necessary for a tax consulting job, you can start searching for a new role through various channels.

You might advance into a position with your current employer or get referred to a role from a mentor or someone in your network. Industry conferences and professional organizations can also prove useful when trying to find a new position.

Consider looking through the following accounting- and tax-related job boards for open positions:

• AICPA Global Career Hub: The Association of International Certified Professional Accountants (AICPA) hosts a job board with finance and accounting positions for CPAs and other accounting professionals.
• Tax-Talent Job Board: This job board hosts hundreds of open positions for tax professionals and offers various professional development opportunities.
• eTaxJobs: Declaring itself the largest job board for tax professionals, eTaxJobs hosts thousands of tax-related job postings from across the country.
• AccountingJobsToday.com: On this job board, accounting professionals can sort and filter their job search by industry, state, and job function.

Career Growth Opportunities

The experience you gain in tax consulting roles can prepare you for several upper management positions, such as financial manager or executive positions. The scope of these roles goes far beyond taxes, but expertise in tax law, planning, and consulting makes tax advisors strong management candidates.

Financial managers and C-suite professionals, such as chief financial officers (CFOs), oversee the overall financial health and activities of an organization. They supervise a team of financial professionals and monitor financial markets, risks, and opportunities. Financial managers present financial considerations to other managers and stakeholders when making organizational decisions.

Though not mandatory, CPA licensure and advanced accounting or finance degrees may help you secure a financial management role. According to Payscale, financial managers made $85,660, and CFOs made $149,590, as of August 2024.

Questions on How to Become a Tax Advisor