Choosing a Professional Tax Preparer? Be Sure To Do These 7 Things
Working with a professional tax preparer can streamline your life and ensure you get the best refund possible, but you should be aware of the potential risks that come with turning your taxes over to someone else.
You are entrusting your financial history and obligations to another party, even though you remain responsible for the outcome. That being the case, it is worth taking extra time and effort to verify that your tax preparer deserves your trust.
Be sure to do these 7 things, recommended by the Internal Revenue Service (IRS) when working with a tax preparer.
- Double check the preparer’s qualifications.
These can be found at the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This lets taxpayers find a preparer with the qualifications that best suits their needs. The list is searchable by name, state and zip code.
- Ask the Better Business Bureau about the preparer.
This is a great way to check the preparer’s history. You’re looking for disciplinary actions against the preparer, and the status of its license for credentialed preparers.
- Ask about service fees.
Be careful of preparers who base fees on the refund, or brag about obtaining bigger refunds than the competition. Don’t give out social security numbers, tax documents, or other information to preparers like these. Sometimes, these companies file taxes without the client’s permission.
- Ask to E-file.
Be sure your preparer offers IRS e-file. Paid preparers who do taxes for more than 10 clients generally file electronically. The IRS has processed billions of e-filed tax returns safely.
- Make sure the preparer can be contacted easily.
It’s possible you will need to get back in touch with the preparer after tax day. Check online for reviews of the preparer vanishing overnight. You don’t want to be responsible for problems someone else created.
- Have records and receipts ready.
Quality preparers will ask to see a taxpayer’s records and receipts. They’ll determine total income tax deductions, credits, etc. Don’t use a preparer who will e-file using the taxpayer’s last pay stub instead of a W-2 as this is against the rules of the IRS.
- Never sign a blank return.
Do not work with any tax preparer who asks you to do so. Any legitimate tax service understands how unprofessional this would be, so it is a clear red flag if you wind up with one of these.
As always, you should review everything carefully before signing off on any returns. Ask questions of anything you do not understand. Be sure the refund goes directly to you and not the tax preparer’s bank account. Review the account and routing number on the form before signing it to verify this.
If you have encountered any of the signs of fraudulent tax preparation, report this to the IRS immediately using Form 14157. If you suspect that your returns have been filed without consent, use from 14157-A.