The main difference is scope. Tax preparation companies prepare and file returns, while Certified Public Accountants (CPAs) provide deeper financial guidance and long-term tax strategy. 

Tax companies usually charge either a flat fee or an hourly rate. Most simple individual returns cost about $200 to $300, while more complex returns often run from $300 to $800. 

Tax companies usually raise prices when returns become more complex. Multiple income sources, self-employment, rental property, investments, and business filings all increase the cost. Large firms, CPAs, and firms in high-cost cities also tend to charge more. 

No. Only certain licensed tax professionals can represent you in a tax audit. 

Most tax companies prepare and file tax returns, but cannot represent clients during an audit unless they employ licensed professionals such as CPAs or Enrolled Agents. Only those credentials allow full representation before the IRS. 

No. Tax companies do not issue Identity Protection PINs. 

The IRS issues the Identity Protection PIN directly to taxpayers to prevent tax fraud and identity theft. Tax companies can help you request or manage the PIN during tax filing, but they cannot generate or assign one. 

The PIN is a six-digit code that must be included when filing a tax return. It confirms your identity and prevents someone else from filing a return using your Social Security number. 

Tax preparation companies must report the breach, notify clients, and take steps to stop tax fraud. 

If a tax company experiences a data breach, federal rules require immediate action to protect taxpayer information and prevent fraudulent filings. 

Required actions include: 

• Report the breach to the IRS to help block fraudulent tax returns linked to stolen taxpayer data. 
• Notify state tax agencies and law enforcement, such as the FBI or Secret Service. 
• Inform affected clients that their personal or financial information may be compromised. 
• Investigate the breach by hiring cybersecurity or forensic experts to identify how the data was accessed and stop further exposure. 

Tax preparation firms must also follow the FTC Safeguards Rule, which requires them to maintain a written security plan that protects taxpayer data.