It's tax time. Do you know how qualified your accountant is?

1. "I don't need some silly old certificate to set up shop."
As you search for an accountant to sort through your capital gains or make the most of your itemized deductions, you'll find no shortage of candidates. The Bureau of Labor Statistics reports that there are over 900,000 accountants, auditors and tax preparers in the U.S. But according to the American Institute of Certified Public Accountants (AICPA), only 450,000 are CPAs, who must pass state exams and, in some states, meet continuing-education requirements.

While some of the rest hold IRS certification or trade association membership, many are merrily filing Form 1040s free of any oversight whatsoever. In California, where tax preparers are required to register with a state agency, unregistered preparer Winston Halal filed returns for 27 clients over five years before the IRS caught up with him in 2000. The agency claimed Halal had bilked the government of more than $100,000 in unpaid taxes, and he was sentenced to 15 months in prison, leaving his clients to fend for themselves. If there's a problem with a return, says Greg Newington, chief of enforcement at the California Board of Accountancy, the taxpayer "has some culpability. They sign it under penalty of perjury."

You don't necessarily need a CPA to file a simple tax return, but some level of credentials -- whether it's an Enrolled Agent certification or at least registration with a state agency -- is a must.

2. "So I'm a convicted felon. Why should that hurt my career?"
Think a criminal conviction might end your career? Not if you're a CPA in Ohio. Timothy Bourke's CPA certificate was revoked by the Accountancy Board of Ohio in August 1996 after he was convicted of theft. But by April of 1997, his certification was reinstated. California CPA Jeannie Johnson received only a slap on the wrist when she was convicted of defrauding her former employer, the Los Angeles Metropolitan Transit Authority, of more than $80,000. Johnson was sentenced to two years in a federal prison, but her CPA license was suspended for only four months.

Luckily, even CPAs in good standing can't completely hide a shady past. To check out any blemishes in your CPA's disciplinary history, go to www.aicpa.org, which provides links to individual states' accountancy boards.

3. "That 'rapid refund' will cost you."
In the first few months of each year, tax-preparation services inundate consumers with ads for speedy refunds, promising cash in as little as 24 hours. But such transactions aren't exactly "refunds." They're refund anticipation loans (RALs), which, like any loan, carry interest and substantial fees: one for a loan application, one for preparation and another for electronic filing.

The total interest and fees can result in an annual percentage rate topping 200%. H&R Block has faced legal action in several states relating to its RAL program. Last year New York City's Department of Consumer Affairs found that company representatives provided misleading information on "rapid refunds" during 86% of phone calls from investigators. But as long as fees are disclosed somewhere in the fine print, firms aren't breaking the law.

4. "I play fast and loose with the tax code..."
Most people who hire an accountant to do their taxes are motivated in part by a mortal fear of coming face-to-face with an IRS auditor. But they might be better off on their own. Ironically, some accountants are just glorified tax protesters whose methods all but guarantee the unwanted attention of the IRS. Atlanta accountant Harold Hearn filed returns for clients in 11 states based on the "Section 861 argument," a point in the tax code that, by one interpretation, exempts all domestic income from taxation. IRS examiners have heard this one before, and they don't think it's funny. The Justice Department filed a suit against Hearn last November, claiming he "preyed on uninformed taxpayers." Hearn insists that the IRS has issued "dozens of refunds" based on the 861 argument.

Others are less creative. Overland Park, Kan., tax preparer Alfred Reece managed to claim almost $3 million in refunds for clients in the 1990s simply by inflating deductions such as medical expenses and charitable contributions. He was sentenced to five years in prison. To help ensure your accountant isn't a criminal prosecution waiting to happen, avoid preparers who guarantee refunds or base fees on a piece of the refund.

5. "...or just make the same goofs that you would yourself."
A missing Social Security number. An incorrect credit claim. A little bad subtraction in determining a refund. The IRS says these are the most common errors made by regular folks doing their own taxes. Turns out those are the same mistakes made by the pros, too.

Granted, a missing Social Security number isn't a huge deal, but some basic errors are more costly. When California CPA Christopher Thomas prepared 1996 estate-tax returns for one client, he included as income more than $10,000 of nontaxable bond interest, failed to file the proper state tax return and didn't bother to claim a $59,000 state tax credit. The state accountancy board found Thomas "grossly negligent" and put him on three years' probation. Thomas did not return calls seeking comment.

And some accountants simply don't specialize in tax services. A good safeguard: Hire an Enrolled Agent (EA). These preparers specialize in taxation and achieve their certification by either working at the IRS or passing a thorough exam. (A CPA may or may not specialize in taxation, and will probably charge more than an Enrolled Agent.) See www.naea.org to locate an EA in your area.

6. "I don't have time for you."
More than 69 million people hired paid preparers to file their federal returns in 1999, according to the IRS -- that's 77 returns for each accountant in the U.S. Since not all accountants offer tax services, the workload for the average preparer is likely even higher.

Still, that doesn't mean your accountant has chained himself to his desk to get your return done. A 1999 survey sponsored by the Texas Society of Certified Public Accountants found that only 60% of hours worked at accounting firms were "billed" hours, or time spent working for clients. The rest, says Raymond Zimmermann, an associate accounting professor at the University of Texas at El Paso and co-author of the study, are "administrative hours," which often means "drumming up new business." So how do you secure your accountant's attention? Newington suggests "you get a clearly articulated engagement letter" spelling out all services, fees and deadlines.

7. "I'll hold your records hostage."
In 1994 california engineer Natalie daCosta hired an accountant to oversee her financial affairs because she expected to be out of the country for several years. She gave San Diego CPA James Haynes limited access to her bank account and authorization to take care of certain expenses. But when daCosta asked to see her bank statements six months later, Haynes refused. When daCosta was able to obtain the records directly from her bank, she found that Haynes had withdrawn thousands of dollars without permission. Haynes repaid the money, but the state board revoked his license.

DaCosta's story isn't unique. Several states list retention of records as a top consumer complaint about accountants. And if your accountant kidnaps a year's worth of business receipts, you'll be hard pressed to document your deductions for the IRS. While accountants "have the ability to withhold (work) for payment," says Johanna Bravo, executive director of Nevada's accountancy board, "their ethics rules (say) they can't retain original documentation." Again, a clear engagement letter will help avoid a tug of war over financial documents, but Newington adds this: "Always keep a copy of everything you give to a CPA."

8. "Good luck pursuing a complaint against me."
If you suspect your accountant of fuzzy math, you might settle the matter with a quick call to your state accountancy board. But don't hold your breath.

The Missouri accountancy board gets an average of 140 complaints a year, many relating to improper filing or sloppy audits, says the board's executive director. But in a typical year, only eight complaints result in formal discipline, such as license revocation or an order to attend an ethics class. Meanwhile, in 1999 the Arizona Auditor General's office found that half the complaints received by the state's accountancy board in 1998 took more than six months to resolve, and some took more than a year.

If your state accountancy board can't or won't handle your complaint, file a grievance with the Better Business Bureau and hire a lawyer, advises Bravo. If your conflict involves a tax preparer, contact your local IRS office. The IRS investigates and prosecutes abusive tax preparers.

9. "I hustle software on the side."
The AICPA is a nonprofit organization, but that hasn't stopped the group from trying to make a little money. In 2000 the group launched CPA2Biz, a Web venture that sells accountants business-related products and services. A group of outside investors ponied up about $70 million for an equity interest, and AICPA doled out equity stakes -- to the tune of nearly 5,000 shares of common stock -- to its senior management.

Those shares don't sit well with some members. "It makes you wonder if they're pulling an Enron," says Kentucky CPA M. Dean Owen. "Our profession is supposed to have a higher degree of ethics than that. At a minimum, there's an appearance of impropriety." (AICPA spokesman Joel Allegretti says the share allocations are valid because the executives paid for them.)

That's not the only problem with CPA2Biz. Thanks to agreements with the AICPA and its investors, the portal sells CPAs many products, including books, technical publications and e-mail systems, some of which accountants can mark up for clients.

Of course, your CPA should offer sound advice, not push products. If he suddenly decides that a state-of-the-art e-mail system is a must for your small business, ask how he discovered the product and why he thinks it's right for you. Then do some comparison shopping to be sure you're getting a fair deal.

10. "Welcome to financial planning amateur hour."
Hoping to provide one-stop shopping for financial services, the AICPA has created a "personal financial specialist" (PFS) designation for CPAs who want to enter the lucrative planning field. To qualify, AICPA members must pass an exam and meet continuing-education requirements. The idea is catching on fast: The AICPA reports that about a third of the group's members offer financial-planning services.

But Sunrise, Fla., certified financial planner Barry Katz says that "all too often accountants give out investment advice without training or...(knowing) whether the investments are appropriate." Plus, according to a 2001 study co-sponsored by Tiburon Strategic Advisors, accountants who offer financial-planning services receive 61% of their planning revenue from product commissions, offering them a strong incentive to sell you certain investment products.

In short, walk away. The best way to sidestep possible conflicts of interest is to hire a true financial planner, and one who isn't commission-driven. Check out the National Association of Personal Financial Advisors' directory of fee-only planners at www.napfa.org.