How to Choose a Tax Preparer
Without a doubt, choosing a tax preparer is a daunting task, especially if you have never had your taxes prepared professionally. While there are many honest tax preparers across the country, there are some dishonest ones as well. These fly by night accountants will not look out for your best interest and are too concerned with their realization and billable hours. They aim to move money from your pocket into theirs with no regard for ramifications or consequences. Horror stories and bad reviews are saturated across the internet while good accountants do not seem to get any press coverage. This article lists 10 steps to ensure you can find a good tax preparer. This tips are taken from the IRS website with some additional commentary.
- Check the preparer’s qualifications– Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This will ensure that the person who is preparing the tax return has a preparer tax identification number (PTIN) and is registered with the IRS to be a paid preparer. Additional qualifications, such as CPA’s, tax attorneys, or enrolled agents are also useful as well.
- Check the preparer’s history– Ask the Better Business Bureau about the preparer. Check for disciplinary action for other professionals. For example, CPA’s must registered with the State Board of Accountancy. This is public information and a simple “Google” search will let you know if any disciplinary action was taken against the preparer.
- As about Service Fees– Avoid preparers who base fees off of a percentage of your refund or tax liability. This does not encourage the preparer to prepare your return accurately. They will prepare the tax return to ensure they make the most money on each return they file.
- Ask to E-file– Taxpayer’s should make sure the preparer offers e-file. Not only is this the quickest way to get a refund, but also preparers who e-file must go through additional steps with the IRS. In registering to become an e-file provider, a more diligent background check is performed by the IRS.
- Make sure the tax preparer is available– A tax preparer should be available to take time to discuss your return with you. A tax preparer who does not take this time may be too busy to ensure your taxes are prepared correctly.
- Provide Records and Receipts– Documentation is one of the most important items in preparing tax returns. Tax preparers who do no request documentation will not be able to ensure you meet all the required criteria for deductions and credits.
- Never Sign a Blank Return– Never sign a blank tax return for a tax preparer, even if they tell you they will prepare it later and go over it with you before they file.
- Review your tax return- If you are unsure about any item on your tax return, be sure to ask your tax preparer to discuss this with you. Review bank information to ensure that your refund is going into your bank account.
- Ensure the prepare signs and includes their PTIN- At the bottom of each 1040 is a paid preparer section. Here, the preparer will sign, date, and place their PTIN number. Make sure this section is completed before you sign the tax return.
- Report abusive tax preparers to the IRS- As mentioned above, most tax preparers are honest and provide great service however, some are dishonest. If you encounter a dishonest prepare, report them to the IRS on Form 14157.
In summary, choosing a tax preparer can be a time consuming process. However, it is better to make the investment of time to ensure that you find an honest tax preparer. Following the 10 steps outlined above will help ensure you are finding a good tax preparer.