Choosing the Right Tax Preparer

Many people look for help from professionals when it’s time to file their tax return. 

If you use a paid tax preparer to file your return this year, the IRS urges you to choose that preparer wisely. Even if a return is prepared by someone else, the taxpayer is legally responsible for what’s on it. So, it’s very important to choose carefully.

"If you are planning on hiring a new tax preparer to help you file your 2011 Federal Income Tax Return this filing season, use the same care you would in selection a doctor or a lawyer.  Remember no matter who prepares your return, you are legally responsible for the contents," said Dianne Besunder, IRS spokeswoman. "Beware of a tax preparer who promises you are large refund without even looking at your records, refuses to sign the return or offers to have your refund deposited into any bank account but your own."

This year, the IRS is also reminding taxpayers to use a preparer who will sign the returns they prepare and enter their required Preparer Tax Identification Number (PTIN).

Here are ten tips to keep in mind when choosing a tax return preparer:

1. Check the preparer’s qualifications. New regulations require all paid tax return preparers to have a Preparer Tax Identification Number. In addition, ask them if they are affiliated with a professional organization and attend continuing education classes. The IRS is also introducing a new test requirement to make sure those who are not an enrolled agent, CPA or attorney have met minimal competency requirements. Those subject to the test will become a Registered Tax Return Preparer once they pass it.  

2. Check on the preparer’s history. Find out if the preparer has a questionable history with the Better Business Bureau and check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants, the state bar associations for attorneys and the IRS Office of Enrollment for enrolled agents.

3. Ask about their service fees. Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers. Also, make sure any refund due is sent to you or deposited into an account in your name. Under no circumstances should all or part of your refund be directly deposited into a preparer’s bank account.

4. Ask if they offer electronic filing. Any paid preparer who files more than 10 returns for clients must file them electronically, unless the client opts to file a paper return. More than one billion individual tax returns have been safely and securely processed since the debut of electronic filing in 1990. Make sure your preparer offers IRS e-file.

5. Make sure the tax preparer is accessible. Be sure you will be able to contact the tax preparer after the return has been filed - even after the April due date, in case questions arise.

6. Provide all records and receipts needed to prepare your return. Reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items. Do not use a preparer who is willing to electronically file your return before you receive your Form W-2 using your last pay stub. This is against IRS e-file rules.

7. Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.

8. Review the entire return before signing it. Prior to signing your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.

9. Make sure the preparer signs the form and includes their PTIN. A paid preparer must sign the return and include their PTIN as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. The preparer must also give you a copy of the return.

10. Report abusive tax preparers to the IRS. You can report abusive tax preparers and suspected tax fraud to the IRS on Form 14157, Complaint: Tax Return Preparer. Download Form 14157 fromwww.irs.gov or order by mail at 800-TAX-FORM (800-829-3676).