omedian Fred Allen used to joke that an income tax form ''is like a laundry list - either way you lose your shirt.''
This year, the Internal Revenue Service has some new forms and new rules that, if not followed correctly, will strip a taxpayer's wallet naked.
The Taxpayer Relief Act of 1997 has put many people over the top when it comes to deciding they need help handling their annual tax headache. New tax forms and 832 changes to the tax code - many of them heralded as huge benefits to average consumers - have a way of doing that.
As a result, the rush is on to find a good tax preparer who can handle the needs for the current filing season and offer some tax planning for the future.
Tax paperwork is such a pain that many people hire the first person they meet who is willing to tackle the job. Witness the success of national and regional tax-prep chains, where customers are assigned to the next available adviser. While there are many good advisers at those firms, that's kind of like letting fate decide who will do the math on some of your most intimate and important financial documents.
Procrastination is another problem. People who wait until the last moment must accept a preparer who can fit them in, rather than shopping for someone best suited to their needs.
But that kind of cavalier attitude toward picking a tax preparer can be costly, because anyone can be one - no training or expertise is required. Preparers run from certified, credentialed professionals who make it a career, to anyone with a pencil, calculator, and the need to pick up a few bucks on the side.
While the best time to select a tax adviser is during times of the year when there is no immediate need for service, hiring help early in the tax season leaves a little room for shopping around.
That said, if you are on the fence about hiring a tax adviser, make a decision in the next few weeks, before the new tax laws send frustrated do-it-yourselfers scurrying for help and make it harder to find preparers with the time to do your return justice.
Plan to interview several preparers. Hiring a tax helper does not reduce your responsibility. You must choose the preparer carefully and should evaluate his or her performance each year; if you were unsatisfied with the way your paperwork was handled last winter, don't go back for more mistreatment this year.
There are four key elements to consider in choosing someone to help with your taxes.
Need. It's a little silly to pay for a yacht if all you need is a rowboat to navigate the sea of paperwork. Any search for a tax preparer starts by determining the level of expertise needed to competently do your paperwork.
The more complicated your return - if you sold investments or property, have long lists of itemized deductions, run a business from home, etc. - the more expertise you should look for.
Think back to your first Schedule D - the form on which capital gains are reported - and you'll understand why you don't want to be any preparer's first shot at something new. (Of course, there is a new Schedule D this year, making it a new experience for everyone. That means finding someone current on the tax changes.)
Gather everything that could affect your return - and review the complexity of previous filings - so that you can adequately determine whether a preparer meets your needs.
Cost. Industry sources can spout a lot of statistics, but there are no reliable numbers on the cost of an average return. Most preparers either charge on an hourly basis or by the forms needed to complete the return.
Get an estimate, and find out how you can keep costs down. (Hint: Deliver your papers in good order, not in a cigar box.)
Pay scale also is tied to expertise. The more you need, the more you can expect to pay, but don't expect all enrolled agents - mostly former IRS employees with a comprehensive knowledge of the tax code - to be cheaper than all accountants. If price is important, shop around.
Qualifications. Tax preparers must be current on the law, especially this year. A tax adviser's ignorance will not shield you from the IRS in the event of mistakes, overzealous deductions, or underpayment of taxes owed.
That said, look for advisers who have taken continuing education classes within the last six months and are familiar with the new rules.
Certain credentials require ongoing classes or certification exams. Find out what makes the preparer qualified to be your personal expert. You will find that advisers with similar professional designations often have different specialties, areas of expertise, and training. Some enrolled agents and CPAs have gone on to get a master's degree in taxation, but it is hardly required.
Make sure the adviser's credentials meet your needs. For instance, only a tax attorney, certified public accountant, or enrolled agent can represent you in an audit.
Find out what percentage of returns the preparer handled in the last few years have been audited. If it's 1 percent or 2 percent, ask why. (The IRS might be focusing on occupations and industries or niches in which the adviser specializes, or the adviser could be playing a little loose with the rules.)
Ask whether the preparer ever has been subject to practitioner penalties. Preparers don't have to answer - and there is no clearinghouse for you to call to find out - so use your intuition. If the adviser gets edgy, trust your gut.
The scope and policy of the practice. If you want a true adviser rather than someone who pushes the paperwork for you, try to find someone with whom you are a good fit, from both a business and personality standpoint.
With about 600 working hours in a tax season, you need to decide if you want a big firm that does hundreds of returns per year or a small practitioner offering more personalized service.
Find out who actually handles your return; if it's not the person you meet with (which happens in many large firms), ask about the qualifications of the person who will do your number-crunching. And find out who will represent you in an audit. Just because some types of experts are allowed to do it doesn't mean they won't pass that chore on to someone else.
Ask how the preparer handles the gray areas of the tax code. If the preparer is ultraconservative and you want to test the limits of the law with aggressive deductions - or vice versa - you have a bad match.
Remember, you are responsible for penalties if the IRS finds that your tax preparer was too enthusiastic with deductions or simply made dumb mistakes. Never forget that it is as easy to lose your shirt by hiring a poor tax preparer as it is by handling the forms on your own.
Boston Globe columnist Charles A. Jaffe is the author of ''The Right Way to Hire Financial Help,'' just released by the MIT Press. He can be reached by e-mail at jaffe@globe.com or at The Boston Globe, Box 2378, Boston, MA 02107-2378.
Find extensive information on filing your 1997 taxes at Boston.com's Your Taxes, sponsored by Ernst & Young.
