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10 Signs You Might Need a Different
Tax Preparer
By:
The person who does your taxes learns all about you – your income, your family, your Social Security numbers and more. Picking the first tax preparer you find or the one with the lowest fees may not be the best choice.
Beware of a tax preparer who:
1. Is vague about fees
Before hiring someone, make sure you understand all possible costs. Ask if there are extra charges for electronic filing, itemizing deductions or any other services. Generally, the more complex your return, the higher the fee. The National Society of Accountants estimates that in 2013, hiring someone to prepare a Form 1040 and a state return with no deductions cost an average of $152; a Form 1055 for a partnership was $590; and a Form 1120 for a corporation averaged $806.
2. Doesn’t ask questions or review your records
A good tax preparer wants to see your records and receipts, and asks questions about your income, expenses, major purchases and other items. Someone who doesn’t do this might make errors, or miss possible deductions or tax credits.
3. Takes short cuts or suggests cheating
If your tax preparer wants you to sign a blank tax form, head for the door. Don’t sign anything that isn’t completely filled out. Read everything before signing. Also, never hire someone who will e-file a return based just on your last pay stub instead of a W-2 form: this is against IRS rules. And a tax preparer willing to lie about your income, number of dependents or other items may also steal your refund money, or not be there to help when the IRS calls with questions.
4. Sets fees based on your refund
Experts warn against using tax preparers who charge fees based on a percentage of the refund, want to split the refund with you, or say they can get larger refunds than other tax preparers. Often, these are the ones who overcharge or try to scam their customers.
5. Wants to deposit your refund in their account
Before signing your completed tax return, check where the refund is being sent. If it’s a direct deposit, the money should go into your own checking account, not the tax preparer’s bank account. Otherwise, they could deduct additional fees before giving you your money – or take your entire refund.
6. Won’t e-file
Under IRS rules anyone who is paid to prepare 11 or more returns must file electronically.
7. Is sloppy with the paperwork
A good tax preparer will sign your tax return and give you a copy, then give all of your records back to you. They also use professional software, not off-the-shelf or IRS Free File software.
8. Doesn’t have a permanent address
It’s important that you’re able to contact the person who did your taxes if there are any questions later on.
9. Doesn’t have a PTIN
Everyone who charges money to prepare a tax return must have an IRS-issued Preparer Tax Identification Number. This PTIN must be listed on the copy of your tax return that is filed with the IRS.
10. Has a history of problems
Before hiring someone, search online for “complaints against _____” their name or company. Also check that they are properly licensed in your state. For accountants, search for your state board of accountancy; for enrolled agents, check with the IRS; and for tax attorneys, contact your state bar association.
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Maybe you don’t have a lot of time to find a tax preparer, and just want to file your return and get a refund as soon as possible. Still, it’s important to work with someone you trust, and to watch for these warning signs.
For further insight, the IRS offers guidelines on who can be paid to prepare a tax return and how to file an official complaint against a tax preparer.
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