Feature Articles:
Taxes
Advice for Choosing a Tax Preparer
Reviewed and adapted with special permission from the IRS by: Andrew Zumwalt, Extension Associate, Personal Financial Planning, University of Missouri-Extension
If you pay someone to do your taxes, be careful. Most tax return preparers are professional and honest, but some are not. Some preparers offer high-cost services or arrange refund anticipation loans that reduce refunds. Take the time to find a qualified tax professional. As a taxpayer, you are ultimately responsible for everything on your return no matter who prepared it. Consider using the tips below to choose a preparer who best meets your tax preparation needs.
- Ask about service fees. Avoid preparers who
claim they can get larger refunds than others, those
who guarantee results or those whose fees are based
on a percentage of the refund.
- Choose a preparer you will be able to reach
after the return is filed. Some preparers only
operate during the tax season.
- Ask questions and get references from tax
preparers’ former clients. Were they satisfied with
the service? Did they pay reasonable fees?
- Beware of a preparer who guarantees results or
who bases fees on a percentage of the amount of the
refund. A practitioner may not charge a contingent
fee (percentage of your refund) for preparing an
original tax return.
- Understand that the most reputable preparers
will request to see your receipts and will ask you
multiple questions to determine your qualifications
for expenses, deductions and other items. By doing
so they have your best interest in mind and are
trying to help you avoid penalties, interest or
additional taxes that could result from an IRS
examination.
- Choose a preparer you will be able to contact
and one who will be responsive to your needs. Ask
who will actually prepare the return before engaging
services. Avoid firms where your work may be
delegated down to someone with less training or some
unknown worker. You should know exactly who works
with your tax matters at all times and how to
contact him or her; after all, you are paying for
it. Determine if the preparer is exporting your
return to a foreign country for preparation. Foreign
countries do not have the same security and privacy
laws as the United States nor is there any recourse
should your information be compromised as a result
of lax or nonexistent privacy procedures.
- Check with the Better Business Bureau to see if
the preparer has a history of complaints. Contact
the state's board of accountancy for CPAs or the
state's bar association for attorneys. Find out if
the preparer belongs to a professional organization
that requires members to pursue continuing education
and that also holds them accountable to a code of
ethics.
- Check preparers’ credentials. Are they an
enrolled agent, Certified Public Accountant or tax
attorney? Only enrolled agents, CPAs and attorneys
can represent taxpayers with the IRS in audits,
collection actions and appeals. Other return
preparers may represent taxpayers only in audits of
a return they signed as a preparer.
- Do you qualify for free tax preparation services? Many communities have Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites. Volunteers provide assistance to low-income, disabled, homebound and English-as-a-second-language taxpayers.
Taking time to do your homework can pay off by saving you money and helping you avoiding the headache of dealing with an unqualified or dishonest preparer. Report suspected tax fraud and abusive tax preparers to the IRS by calling 1-800-829-0433.
Source: IRS Tax Tip 2006-06
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Last update: Thursday, March 20, 2008
