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Tips for Choosing a Tax Return Preparer

A large number of taxpayers hire a return preparer to prepare and file their tax returns. Most return preparers are legitimate and honest. However, taxpayers can be in danger if they come in contact with fraudulent return preparers. Here are the eight points which will indicate the type of preparer you’re dealing with.

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1. Personal Tax Identification Number (PTIN)

The IRS has mandated that every paid tax return preparer must have a Personal Tax Identification Number, or PTIN. A return preparer is required to include his or her PTIN on every tax return they file. Confirm that your return preparer has included his or her PTIN on your tax return.

2. Better Business Bureau (BBB) Complaints

Check the BBB website to see if your return preparer has consumer complaints, or any punitive actions were taken against them. For CPAs, check with the state board of accountancy. For attorneys and enrolled agents, check with the state BAR association, and the IRS Office of Enrollment, respectively.

3. Fee

Avoid preparers that charge extravagant fees, or claim that they can get you a bigger refund than others, or base their fee on a percentage of your refund. Do not allow a preparer to get your refund in their bank account or address.

4. Qualifications

Consider if the preparer is affiliated with a professional organization and/or attends continuing education classes.

5. Business Existence

Check if the preparer has been around for a number of years. Fraudulent return preparers disappear quickly after filing season, leaving their clients stranded when there is a problem. Find out about your preparer by researching online, and get their complete contact information.

6. Receipts and Tax Records

A return preparer that is trustworthy will ask you for your W-2, receipts of your deductions and other tax records to determine your exact income, and qualifying deductions and credits. An incompetent preparer or a fraudulent one will be willing to compromise on accuracy. Lack of accuracy in filing can lead to back taxes, understatement of income, and/or claiming of wrong tax credits and deductions.

7. Signing the Return

If a preparer asks you to sign a blank return, discontinue with their service. Review your return for accuracy before your preparer files it. Request that it be filed electronically.

8. Report Abuse

If you came in contact with the fraudulent preparer, whether the preparer was able to defraud you or not, report the abusive preparer or suspected abuser to the IRS using Form 14157, Compliant: Tax Return Preparer.

If you suspect that your preparer filed a fraudulent return on your behalf or made changes without your approval, file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can download these forms from the IRS website – irs.gov – or call 800-829-3676.