The extension deadline is coming up – avoid bad apples when choosing a preparer
The October 16, 2023, extension filing deadline is coming up, and many taxpayers who requested an extension are now choosing a tax return preparer. Most tax return preparers provide honest, quality service, but there are some bad apples out there – from unethical preparers to outright scammers. When hiring an individual or firm to prepare a tax return, taxpayers need to understand how to choose a tax preparer wisely and what questions to ask.
Things to consider when choosing a tax return preparer
Ensure the preparer signs and includes their PTIN. By law, anyone who is paid to prepare or help prepare federal tax returns must have a valid Preparer Tax Identification Number. Paid preparers must sign and include their PTIN on any tax return they prepare. Not signing a return is a red flag that the paid preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. Taxpayers should avoid these unethical tax return preparers.
Make sure the preparer is available year-round. If questions come up about a tax return, taxpayers may need to contact the preparer after the filing season is over.
Review the preparer’s history. Taxpayers can check with the Better Business Bureau for information about the preparer, any disciplinary actions, and the license status for credentialed preparers. Other resources include: the State Board of Accountancy’s website for CPAs; the State Bar Association for attorneys; and the IRS Directory of Federal Tax Return Preparers for enrolled agents, or verify an enrolled agent’s status online.
Ask about service fees. Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own financial accounts. Be wary of tax return preparers who claim they can get larger refunds than their competitors.
Ensure their preparer offers IRS e-file. The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit.
Once a taxpayer has selected a tax preparer, they should stay vigilant
Good preparers ask to see records and receipts. They’ll also ask questions to determine the client’s total income, deductions, tax credits and other items. Taxpayers should avoid a tax return preparer who e-files using pay stubs instead of W-2s. This is against IRS rules.
Taxpayers should review the tax return before signing it and ask questions if something is unclear or inaccurate.
Any refund should go directly to the taxpayer – not into the preparer’s bank account. Taxpayers should check the routing and bank account number on the completed return and make sure they’re accurate.
Taxpayers are responsible for filing a complete and correct tax return. They should never sign a blank or incomplete return and never hire a tax return preparer who asks them to do so.
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Blog Poster2023-09-18T10:54:43-04:00September 6th, 2023|Tax|
