IRS Offers 9 Tips on Picking a Tax Preparer

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Taxpayers who don’t want to brave filing IRS tax forms on their own will be eager to find preparers, and soon. 

The IRS offers nine tips for taxpayers that preparers should expect to be asked about or have to verify for prospective clients about their credentials, the filing process and how it is navigated, and any potential problems that may arise.

Preparers would do well to ensure that any information about them is properly listed — because sometimes it isn’t.

1. Tax preparers are legally required to have a Preparer Tax Identification Number (PTIN).  Preparers who are paid must sign the return and include their PTIN.

2. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications is a good source for taxpayers but it isn’t foolproof. In fact, the directory includes only certain federal tax preparers — those with an active PTIN who also are an enrolled agent, CPA, attorney, enrolled retirement plan agent, enrolled actuary and Annual Filing Season Program participant.

The directory doesn’t list non-credentialed preparers who don’t participate in the Annual Filing Season Program. 

Attorneys, CPAs and enrolled agents can represent any client to the IRS in any situation, the agency advises. Annual Filing Season Program participants can do that in more limited scenarios. Preparers without credentials who don’t participate in the program can only represent clients on returns prepared and signed on or before Dec. 31, 2015.

Preparers who think they meet the criteria should log into their PTIN account at IRS.gov/ptin and confirm their information.

3. Have you checked your professional history lately? The IRS advises taxpayers to ask the Better Business Bureau about preparers, check for disciplinary actions and licensing status. CPAs can be checked out at their state’s Board of Accountancy; attorneys, at the State Bar Association; and enrolled agents, at “verify enrolled agent status” at IRS.gov.

4. The IRS cautions against using preparers who base fees on a percentage of refunds or who claim they get taxpayers bigger refunds than competitors do. Taxpayers also are cautioned not to turn over prior tax documents, Social Security numbers and other information because some preparers have used the information to file returns without the taxpayer’s permission.

5. Despite the agency’s problems with electronically filed documents, the IRS still maintains that taxpayers should e-file. Paid preparers who handle taxes for more than 10 people usually have to file electronically, the IRS states.

6. Taxpayers are cautioned against using preparers who will electronically file returns using taxpayers’ last pay stub instead of a Form W-2, which is a violation of IRS rules.

7.  Taxpayers should ensure the accuracy of the return before they sign it.

8.  Taxpayers should ensure that their refund goes directly to them and not to the preparer’s bank account, and should review routing and bank account numbers on the return.

9.  Taxpayers who suspect preparers are dishonest or fraudulent should use Form 14157, Complaint: Tax Return Preparer. Taxpayers who think a preparer filed or changed their return without their approval should file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.

About Terry Sheridan

Terry Sheridan

Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.

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