Selecting a qualified tax preparer is an important step in protecting your financial security and avoiding potential tax issues. While most tax professionals are reputable, some engage in fraudulent practices, scams, or even identity theft. Before handing over personal and financial information, take the time to evaluate their credentials and reliability.
Your Responsibility as a Taxpayer
Even if someone else prepares your tax return, you are ultimately responsible for the accuracy of the information submitted. That’s why it’s essential to choose a preparer who follows IRS regulations and operates with integrity.
Warning Signs of an Untrustworthy Preparer
Unwilling to Sign the Tax Return
A legitimate tax preparer must sign the return as the paid preparer. If someone refuses to sign and asks you to submit the return yourself, this could indicate dishonest practices. Some preparers make unrealistic promises about large refunds or charge fees based on the refund amount, which is a questionable approach.
For paper returns, they may ask you to print and mail it yourself. For electronic filing, they may complete the return but avoid digitally signing it. These actions suggest they do not want to be held accountable for the return, which could lead to potential legal and financial problems for you.
Lacks a Preparer Tax Identification Number (PTIN)
Anyone who is paid to prepare federal tax returns is required to have a valid PTIN. They must also sign the return and include their PTIN. Always verify that your tax preparer has the proper credentials before proceeding.
How to Find a Qualified Tax Professional
When selecting a tax preparer, consider the following:
- Verify Their Credentials and Background
Research the preparer’s reputation through the Better Business Bureau. If they are a CPA, check with the State Board of Accountancy. For attorneys, consult the State Bar Association. To verify an enrolled agent, visit the IRS website and search for “verify enrolled agent status.” - Confirm Their Availability
Tax matters don’t always end with filing season. A reliable tax preparer should be available throughout the year to answer questions or address any issues that may arise later. - Understand the Fee Structure
A trustworthy tax professional will clearly outline their fees upfront. Be cautious of anyone who bases their fees on a percentage of your refund or asks to have your refund deposited into their own account. - Ensure They Are an IRS-Authorized E-File Provider
Tax professionals authorized by the IRS to e-file returns follow strict guidelines for accuracy and security. Filing electronically with direct deposit can also speed up refund processing, typically within 21 days. - Ask About Their Process
A reputable tax preparer will request records, receipts, and other documentation to ensure your tax return is complete and accurate. Be wary of anyone who prepares a return using only a pay stub instead of a W-2, as this is against IRS e-file rules. - Never Sign an Incomplete Return
Before signing, review your return carefully. If anything seems unclear or incorrect, ask for clarification. Your refund should always go directly to your account, not your preparer’s. Double-check the banking details to ensure accuracy. - Know Their Representation Rights
Not all tax preparers have the authority to represent you before the IRS. CPAs, enrolled agents, and attorneys can handle tax matters in any situation. Participants in the IRS Annual Filing Season Program have limited representation rights.
Taking the time to research and select a qualified tax preparer can help you avoid potential complications and ensure your tax return is filed accurately. Make an informed choice before entrusting someone with your financial information.
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