Chinese-Speaking CPA and Bookkeeper: What to Check Before Hiring

Do I need a Chinese-speaking CPA, or is a bookkeeper or tax preparer enough?

Speaking Chinese does not show what a person may do for your business. Anyone paid to prepare, or help prepare, all or substantially all of a federal return must hold a PTIN, though typing or other purely mechanical help does not count (PTIN rule; PTIN FAQ). Only CPAs, enrolled agents and attorneys can represent you in any IRS matter (credentials).

A bookkeeper is a different role. The table is about preparing and signing returns; it says nothing about keeping books. Judge a bookkeeper by what they can show: books kept for a business like yours, and clear answers on who owns the accounting file and logins, who reconciles the accounts each month and who handles RMB lines (see the books section below). For what to ask, see questions to ask before hiring a bookkeeper; for which role you need, see bookkeeper, accountant or CPA.

When the case is not simple. An account or a company in China, regular money to or from family there, returns in both the US and Canada, or years with nothing filed all add reports beyond the return. Then a credential check is only the start: ask who prepares those reports. If you are comparing quotes, or leaving a preparer who never asked about China, these are the cases where one accountable person has to cover the books, the returns and the foreign reports; ask each candidate who that is. Gather accounts abroad with their highest balances, family transfers with dates, China company documents and prior returns; the full list is below.

How do I find a Chinese-speaking CPA or accountant near me?

Start from a name you can verify, then test the language. The IRS directory searches by city, state and ZIP code, and a state board of accountancy or the CRA's preparer directory can confirm a name you were given, for example by family or a community group. Ask each candidate:

• Does the person who signs my return speak Chinese, or only the staff?
• Will the engagement letter, the questions about my accounts and the return summary be in Chinese, and which version governs?

To compare firms and quotes across both countries, see finding a cross-border tax accountant.

How do I check a US CPA, enrolled agent or tax preparer?

Check the licence with the body that issued it, the PTIN, and the IRS preparer directory. Each answers a different question.

1. CPA licence. Every state has its own board of accountancy. The California Board of Accountancy is one example: it lets you search any California CPA or firm for licence status and discipline. Use the board of the state on the preparer's licence.
2. IRS directory. The IRS directory of preparers with credentials and select qualifications lists attorneys, CPAs, enrolled agents and Annual Filing Season Program participants by name, city, state and ZIP code. A preparer who is not listed may still be qualified, so ask about education and training (IRS).
3. PTIN. A paid preparer must have a PTIN and enter it on the return filed with the IRS, though not on your copy (IRS). Ask for the number before you hire.

For the wider US comparison, see CPA, enrolled agent or tax software.

How do I check a tax preparer in Canada?

For a personal return, the CRA lists preparers certified to file through its EFILE service, and you authorize each filing by signing Form T183. A corporation's electronic return uses a separate form, T183CORP, so ask a preparer how they file a corporation's return. If a Canadian preparer uses the CPA title, ask which provincial CPA body they belong to and confirm it with that body.

• Directory. Preparers in the CRA directory are certified to file your return through EFILE.
• Registration. The CRA's EFILE rules say a transmitter cannot accept and transmit records from an unregistered preparer. Ask for the EFILE registration.
• Form T183. Before the preparer files a personal return electronically, you sign Part F of Form T183, which must match the electronic return (CRA).

If you live in Quebec, you also file a separate Quebec return with Revenu Québec (CRA), so ask who prepares it too. For more, including Revenu Québec's separate authorization, see choosing an accountant in Canada.

Who signs my return, and who speaks to the IRS or CRA for me?

In the US the paid preparer signs with a PTIN and you separately authorize anyone who speaks for you. In Canada you sign an electronic-filing authorization (Form T183 for a personal return) and authorize a representative through the CRA. In both countries you stay responsible for what is filed.

• US signature. Paid preparers must sign and include a valid PTIN on every return they prepare. A preparer who refuses is a "ghost" preparer (IRS).
• US representation. Form 2848 authorizes an individual eligible to practice before the IRS to represent you (IRS). Form 8821 only lets someone inspect or receive your confidential tax information (IRS).
• FBAR. The FBAR goes to FinCEN, not with the tax return (IRS). A CPA, attorney or enrolled agent can file it for you only with your signed Form 114a; without it, you sign and submit it yourself (FinCEN).
• Canada. On a personal return, sign Part F of Form T183 to authorize electronic filing (CRA). To have someone deal with the CRA for you, authorize them online in My Account or My Business Account, or mail Form AUT-01, which gives offline access only (CRA). Choose the level of access with care: some levels let a representative change your account, not only view it (CRA).

Both agencies hold you responsible for the information on your return, whoever prepared it (IRS; CRA). Ask the preparer to go through the whole return with you in a language you read before you sign.

Which China-related items should my accountant ask about?

An accountant should ask about accounts, family transfers and companies in China before preparing anything, because each can require a report separate from the return. Which ones apply depends on whether you are a US citizen or resident, a Canadian resident, or both.

An individual who first becomes resident in Canada does not file Form T1135 or T1134 for that first year, but a corporation gets no such exemption (ITA s. 233.7; CRA). Give the accountant the date your Canadian residence began.

Other guides own the detail: which accounts count on the FBAR, foreign account reporting, giving money to family abroad, gifts from abroad, forms for a foreign company, Canadian foreign property and affiliate reporting, foreign-owned single-member LLC filing and moving back to China and Chinese tax.

A missed report can cost money even when no tax is due. The initial penalty for missing Form 5471 information is US$10,000 for each foreign corporation for each year (IRS). If earlier years were missed, see catching up on missed foreign reporting.

Can one Chinese-speaking accountant handle both my US and Canadian returns?

One accountant or firm can, if the person who prepares each return is allowed to do so in that country and someone owns the link between the two. Otherwise use two preparers, one in each country, who share your documents.

Each return needs its own preparer: a PTIN holder signs the US return, and an EFILE-registered preparer files a Canadian personal return, which you authorize by signing Part F of Form T183. Ask before you sign an engagement:

• Who signs the US return as preparer, and who files the Canadian one?
• Who files the FBAR, Form T1135 and any reports on a company in China?
• Who reconciles income, tax paid in each country and exchange rates between the two returns?
• Who answers a letter from the IRS, and who answers one from the CRA?

For a Canadian business with US activity, see when a Canadian business needs a cross-border accountant.

How are books kept when bank statements and invoices are in Chinese or RMB?

A US return is generally in US dollars and a Canadian return in Canadian dollars, so each RMB transaction needs its converted amount, with the RMB amount, the exchange rate and the source document kept beside it. Canadian records written in Chinese must also be translated into English or French.

• US dollars. Amounts on a US return are reported in US dollars, generally at the spot rate when you receive, pay or accrue the item. The IRS has no official rate and generally accepts any posted rate used consistently (IRS).
• Canadian dollars. Canadian tax results are generally worked out in Canadian currency; a corporation resident in Canada can elect to report in the US dollar, euro, British pound, Japanese yen or Australian dollar, and the renminbi is not one of them. The CRA's default is the Bank of Canada rate on the day the amount arose; another source is accepted only if it is widely available, verifiable and used consistently (CRA Folio S5-F4-C1). The Bank of Canada publishes daily renminbi rates.
• Language. Canadian books and records must be kept in English, French or both (CRA); otherwise they must be translated (CRA). When the IRS requests records from a US company owned 25% or more by a foreign person (the Form 5472 row above), the company must translate into English any portion the IRS asks it to, within 30 days of the translation request, and may ask for more time (26 CFR 1.6038A-3).
• The FBAR uses its own rate. Each account's highest balance, taken from statements, is converted at the Treasury rate for the last day of the calendar year (FinCEN). That is not the rate in the books, so keep the highest RMB balance from the statements.
• Family transfers. Record each by person, date, direction and purpose. Whether the money is a loan, a gift or a capital contribution decides how it is booked; see family money in US business books and parents' money in a Canadian business.

On every foreign-currency line, ask the bookkeeper to record the date, the RMB amount, the rate and its source, the converted amount and a short English description of the original document. See foreign-currency accounts in US books and expenses paid in foreign currency. If the bookkeeper works from outside your country, see hiring an offshore bookkeeper.

What do I bring to the first meeting?

Bring the papers that show every country your money touches, so the accountant can tell which returns and reports apply before quoting.

• Prior returns. US and Canadian returns, notices, and any FBAR, Form 8938, T1135 or similar reports already filed.
• Accounts abroad. For each: the institution, type, owners, signers, open and close dates, and the highest and year-end balance in RMB from statements. Include payment-app or wallet balances.
• Family transfers. Date, amount, currency, sender, receiver, relationship, purpose and any paper (loan note, gift letter, wire confirmation).
• China company. Business licence, ownership register showing who holds what share, financial statements, tax filings, bank statements, and any loans, dividends or fees between it and you.
• Your status. Citizenship or green card, Canadian status and the date it began, and where you lived and for how many days each year.
• Business records and notices. Bank statements, invoices, payroll, the accounting file, contact details for the previous bookkeeper or accountant, and any letter from the IRS, the CRA or a tax office in China.

What are the warning signs when hiring a Chinese accountant?

The warning signs are the same in any language: refusing to sign, a credential you cannot verify, pricing tied to your refund, and brushing off foreign reports.

• Will not sign or give a PTIN. The IRS calls this a major red flag (IRS). It also lists a claimed CPA, enrolled agent or attorney credential that is not valid, no copy of your return, and original records not returned.
• Fees from your refund, or cash with no receipt. The IRS says to avoid fees based on a percentage of your refund and preparers who offer to deposit it into their own accounts (IRS Topic 254). It also names cash-only payment with no receipt and invented income or deductions (IRS).
• Unusually large refunds, or discouraging a second opinion. The CRA lists both among its warning signs of tax schemes and their promoters (CRA).
• A blank or incomplete return to sign. Never sign one (IRS).
• Foreign items dismissed. An accountant who says an account, a family transfer or a company in China needs no report before asking the questions above may have skipped the step that decides which reports apply.

For what to ask a bookkeeper, see questions to ask before hiring a bookkeeper.

Example

These examples are illustrative; each states its currency.

A Toronto restaurant corporation, parents in China

A Toronto restaurant owner keeps the corporation's books in CAD. She sends CAD 80,000 a year to her parents in China and keeps an RMB account that held about CAD 120,000 at its highest. Three questions decide the work. Whose money is the CAD 80,000: her pay, a dividend or the corporation's? Who owns the RMB account, she or the corporation? And what did the account cost? The Form T1135 test, more than C$100,000, is on cost, generally the adjusted cost base, not peak value, so CAD 120,000 at its highest does not settle it; the owner's other specified foreign property is added, and property used or held only in an active business is excluded (CRA). The accountant must handle the corporation's books and ask about all three. See corporation-paid personal expenses.

A Houston LLC owner with two Chinese bank accounts

A US citizen who lives in the US and owns a Houston LLC holds, in his own name, RMB 900,000 across two Chinese bank accounts. At an illustrative 7.2 RMB per dollar that is about USD 125,000, above the FBAR threshold, and likely above the Form 8938 threshold if he files as unmarried. Before hiring, he checks the preparer's credential, whether the quote includes the FBAR and Form 8938, and who signs and files the FBAR (Form 114a if the preparer files it for him).

A couple with an S corporation and a Shenzhen company

A couple's US S corporation has USD 400,000 of revenue. They also own 100% of a Shenzhen company with RMB 2,000,000 of revenue. The accountant must say who prepares the US report on the Shenzhen company (Form 5471, a form that only reports on the company, if it counts as a foreign corporation for US tax purposes), which attaches to the return of whoever holds the shares, the couple or the S corporation. The accountant must also ask whether the company's own bank accounts must be reported on an FBAR, since the couple own all of it, and say how the two sets of books connect: loans, fees and dividends between them, and RMB figures converted for the US return. Also ask whether anyone filed a Form 8832 election for the company, if it is eligible to make one: it changes whether Form 5471 applies, and can take effect no more than 75 days before filing or 12 months after (forms for a foreign company).

Different for you?

• You want one accountant who works in Chinese and can handle your books and returns across China, the US and Canada: the first questions are which countries' returns and foreign reports apply to you and what the books must hold. Get bookkeeping help for the books, or cross-border tax help for the returns.
• You are comparing quotes or leaving a preparer who missed a report: a quote should say who signs each return, who files each foreign report and who keeps the RMB books. See the cross-border accountant guide for how to read a quote, or get cross-border tax help.
• A foreign report was missed in earlier years: see missed FBAR or TFSA forms from Canada, or get FBAR help.
• Your preparer filed a wrong return or stopped responding: see a tax preparer who filed a wrong return and taking over books from a former accountant.
• You are moving back to China: see moving back to China and Chinese tax.