In my decades of experience gleaned from my almost 50 years of having been both inside and outside of the IRS, most accountants and preparers are very competent at return preparation, producing financial statements, and general accounting matters.  However, providing a tax resolution service by sitting across the table from an IRS Revenue Agent, IRS Revenue Officer, IRS Appeals Officer or IRS Appeals Settlement Officer or an IRS Tax Compliance Officer demands specialized knowledge of IRS tax agency audit, collection and appeals procedures, policies and practices.  In my opinion, this is generally limited to those whose practice primarily focuses on providing tax resolution services.  And in my opinion, representatives who have had actual (and successful) inside-the-IRS experience will have the best opportunity to resolve their clients' tax controversies with the least amount of financial consequences.

The IRS and all State tax agencies will only permit representation by individuals who are certified or acknowledged by a government agency as meeting the necessary technical (tax law and continuing education) qualifications.  These individuals are Licensed Enrolled Agents (EA), Certified Public Accountants (CPA) or Attorneys.  California has a special category of preparers with a title of CTEC.  They have very limited representation authority and, in my experience, a very small percentage would have had inside the IRS or a State tax agency prior job experience.  IRS employees who held technical positions (such as Revenue Agents, Revenue Officers, Appeals Officers, Settlement Officers, TCOs and Special Agents) can automatically qualify for Enrolled Agent (EA) status assuming their job performance met the high standards required for the license.  

Potential Conflicts of Interest

Another factor to consider in deciding whether or not to retain your current accountant or preparer to represent you is whether there may be a possible or potential conflict of interest.  The IRS and most state tax agencies can impose significant civil penalties against a preparer who negligently prepares a tax return.  Consider this scenario.  A preparer makes a mistake on a tax return and the IRS is proposing to assess an accuracy penalty against the taxpayer (client).  Rather than incur any monitory penalty for their error, the preparer (during his or her representation, say, in an audit....) may try to shift the Revenue Agent's or TCO's focus from himself or herself to the client as the underlying cause of the tax problem or tax issue - thereby resulting in the IRS imposing the accuracy or negligence penalty on the taxpayer/client rather than a preparer penalty on the preparer. 

I have had success in obtaining client relief from potential penalties (such as the accuracy related penalty) where I was able to persuade the Revenue Agent or TCO to assert the penalty against the preparer (generally, much less in dollar amount) instead of the taxpayer as the underlying cause for the deficiency. Penalties are typically proposed for failing to properly account for an item or items of income, deduction and/or credit on a tax return. 

If the IRS proposes an accuracy related penalty against a taxpayer, I would expect the taxpayer (client) would be curious as to whether it was their mistake or their preparer's.  I have neither experienced (as an IRS employee) nor heard of a situation of a preparer telling a Revenue Agent,  "That was my fault - hit me with the preparer penalty - my client should not be penalized."  I expect such a scenario would be rare.  Multiple preparer penalties could lead to disciplinary actions by the Office of Professional Responsibility (OPR) - the IRS function that watches carefully over those individuals who practice before the IRS to ensure their actions are responsible and ethical.  Therefore, preparers are very much aware that being subject to a preparer penalty could have far reaching consequences beyond the basic penalty amount they would have to pay for their mistake.