Business Bulletin: How to select a tax preparer

Business Bulletin: How to select a tax preparer

January 19th, 2018 by Jim Winsett in Business Around the Region

Q. I want to file my income taxes early and need help with preparation. How do I find a reputable tax firm to assist? Much of the advertising seems misleading.

A. This is a critical issue for you and other consumers. Tax evasion scams, including fraudulent tax return preparation, cost taxpayers billions of dollars every year and is continuing to grow. The Internal Revenue Service reports criminal investigations into fraudulent tax return preparers continue to rise each year. Most people get help filing their taxes, either from computer software or a professional tax preparer. In the media there are horrors stories about tax service rip- offs and scams. They have some consumers concerned about who they can trust with their financial data and private information.

A paid tax return preparer is primarily responsible for the overall, substantive accuracy of your tax return(s). If there is a problem with your return or you are audited by the Internal Revenue Service (IRS), the tax preparer can help you address the issue and can often represent you. The preparer is required to sign your tax forms (paper or electronic) and provide their preparer tax identification number (PTIN), a number assigned by the IRS.

Jim Winsett of the BBB.

Jim Winsett of the BBB. ...

Photo by Contributed Photo /Times Free Press.

Look for credentials. Anyone with a PTIN can prepare your tax forms for you, but some tax preparers have more training and qualifications than others. Enrolled agents, certified public accountants (CPAs) and attorneys have unlimited rights to represent their clients to the IRS on all matters. Other preparers can help you with forms and simple IRS matters, but are limited otherwise, and they can't help you if they didn't prepare your form. Learn more about tax preparer credentials on the IRS website.

Dishonest tax preparers can commit fraud in a number of ways. They can claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients. Fraudulent preparers also may manipulate income figures to obtain fraudulent tax credits, such as the Earned Income Tax Credit.

Missing the signs that a preparer may be abusive could cause the taxpayer considerable financial problems. Some of the most common signs where you should be alert include:

» Claiming that they can obtain larger refunds then other preparers.

» Basing their fee on a percentage of the amount of the refund. Fees should be based on the complexity of the return, never on the size of the tax savings or refund.

» Be wary of road side advertising. Signs on street corners, or posted on telephone or utility poles, often suggest transit tax preparers who are not licensed nor qualified to accurately file income taxes. Claiming they can get you immediate payment of your return. Keep in mind that this is a loan. Fraudulent tax preparers often pad their pockets by giving cash up front at a high interest rate while presenting it as an instant refund from the federal government.

» Refusing to sign the tax return or provide the taxpayer a copy for his or her records. Always make sure that you have something in hand that shows proof of what transpired and you should have a receipt for services rendered. This receipt is also your tax deduction for next year.

Taxpayers should be very careful when choosing tax preparers. While most preparers provide good service to their clients, a few unscrupulous tax preparers file false and fraudulent tax returns and ultimately defraud their clients.

It is important for a taxpayer to know that even if a preparer handles the tax return, the taxpayer is ultimately responsible for all the information on it. The Better Business Bureau, along with the IRS, recommends that taxpayers follow these tips when hiring a preparer:

Get referrals from satisfied clients and check their BBB Business Profile Report. www.bbb.org .

Ask the preparer about their training, experience and current knowledge of tax law.

Find out whether the preparer has ever represented taxpayers in an audit, or has ever been denied eligibility to do so.

Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months or even years after the return has been filed.

Most importantly, taxpayers should always review their return before signing, ask questions on entries they do not understand, and get a copy of the return for their records. Finally, do not ever sign a blank tax form or one filled out in pencil.

Jim Winsett is president of the Better Business Bureau in Chattanooga.

Getting Started/Comments Policy

Getting started

  1. 1. If you frequently comment on news websites then you may already have a Disqus account. If so, click the "Login" button at the top right of the comment widget and choose whether you'd rather log in with Facebook, Twitter, Google, or a Disqus account.
  2. 2. If you've forgotten your password, Disqus will email you a link that will allow you to create a new one. Easy!
  3. 3. If you're not a member yet, Disqus will go ahead and register you. It's seamless and takes about 10 seconds.
  4. 4. To register, either go through the login process or just click in the box that says "join the discussion," type your comment, and either choose a social media platform to log you in or create a Disqus account with your email address.
  5. 5. If you use Twitter, Facebook or Google to log in, you will need to stay logged into that platform in order to comment. If you create a Disqus account instead, you'll need to remember your Disqus password. Either way, you can change your display name if you'd rather not show off your real name.
  6. 6. Don't be a huge jerk or do anything illegal, and you'll be fine.

Chattanooga Times Free Press Comments Policy

The Chattanooga Times Free Press web sites include interactive areas in which users can express opinions and share ideas and information. We cannot and do not monitor all of the material submitted to the website. Additionally, we do not control, and are not responsible for, content submitted by users. By using the web sites, you may be exposed to content that you may find offensive, indecent, inaccurate, misleading, or otherwise objectionable. You agree that you must evaluate, and bear all risks associated with, the use of the Times Free Press web sites and any content on the Times Free Press web sites, including, but not limited to, whether you should rely on such content. Notwithstanding the foregoing, you acknowledge that we shall have the right (but not the obligation) to review any content that you have submitted to the Times Free Press, and to reject, delete, disable, or remove any content that we determine, in our sole discretion, (a) does not comply with the terms and conditions of this agreement; (b) might violate any law, infringe upon the rights of third parties, or subject us to liability for any reason; or (c) might adversely affect our public image, reputation or goodwill. Moreover, we reserve the right to reject, delete, disable, or remove any content at any time, for the reasons set forth above, for any other reason, or for no reason. If you believe that any content on any of the Times Free Press websites infringes upon any copyrights that you own, please contact us pursuant to the procedures outlined in the Digital Millennium Copyright Act (Title 17 U.S.C. § 512) at the following address:

Copyright Agent
The Chattanooga Times Free Press
400 East 11th Street
Chattanooga, TN 37403
Phone: 423-757-6315
Email: webeditor@timesfreepress.com


Loading...