Roughly 60% of tax filers use tax return preparers. If you are among them, the IRS recommends you choose carefully. Tax preparers are supposed to help you navigate the complex world of tax returns and tax laws, not steal your money. Yet, while most preparers provide honest, high-quality service, there are some who are dishonest and unscrupulous, according to the IRS. They engage in refund fraud, identity theft and other illegal scams that can hurt you. Below are some guidelines to help you select a tax preparer.
1. Check his or her credentials – Make sure they have an IRS Preparer Tax Identification Number (PTIN) for 2015. This certifies the person is authorized to prepare federal tax returns. Check to see if the preparer has any special credentials. Some preparers may be certified public accountants, attorneys or enrolled agents (EA). An EA is certified to represent you before the IRS. Some belong to professional tax organizations, or have completed continuing tax education courses to keep current on the latest changes in tax law. For instance, this year all tax preparers should be up to speed on all the ways the Affordable Care Act provisions might affect clients’ tax situation.
2. Be wary of contingent fee structures – Do not use someone who bases his fee on the size of your refund. And always have your refund sent directly to you or your bank account. Never have the IRS deposit it directly into your tax preparer’s bank account.
3. Work with preparers who can e-file your return – Tax professionals who prepare more than 10 returns must be able to file returns electronically, which is the safest and most accurate way to file, according to the IRS. Make sure the preparer signs the return and gives you a copy. A paid preparer is required to sign her name and include her PTIN on your return. She should also give you a copy of the completed return sent to the IRS.
4. Avoid preparers who don’t ask to see your records and receipts – They need to verify what you tell them, and you need to have proof of anything the preparer puts on your return. Avoid anyone who says he can just file your return using your last pay stub instead of your official W-2 form from your employer. Pick a preparer who will be available after April 15. You need to know you can contact your preparer after your return is filed should questions arise.
5. Avoid preparers who ask you to take questionable shortcuts – Also steer clear of someone who encourages you to make up expenses or claim tax breaks you know you’re not eligible for and cannot back up with records. Do not sign a blank or incomplete return. You are legally responsible for all the information on your return. So you have to review everything on it and get any questions you have answered or errors corrected before signing it. Do not just trust your preparer to take care of everything without your oversight.