11 Jan Who Should I Hire To Do My Taxes?
We all know there are good and bad people everywhere, both inside the IRS and in the tax practitioner community alike. Routinely readers of this blog report specific and egregious allegations of tax practitioner misconduct in violation of United States Treasury Department Circular 230. It really is tragic but these are the pitfalls of an industry lacking governance.
What constitutes a ‘good’ practitioner is more than just credentials, its about connecting with a person and sharing your most private information in detail. The only way I know how to connect with anyone and trust the person to be reliable and consistent is to spend time together. Ask questions, a LOT of questions. Through time together you will get a sense as to whether reasonable knowledge base and support networks exist.
So take your time and be patient with the process. Interview several practitioners to see who you connect with best. NEVER mix friends or family with business, but find out who is happy and solicit referrals. At the very least the person signing your return for hire must have an IRS Preparer Tax Identification Number (PTIN). The following are some other helpful points to ponder produced by the IRS.
1. Check the preparer’s qualifications. Ask if the preparer is affiliated with a professional organization like the National Association of Enrolled Agents and attends continuing education classes. The best resource IMHO to fined an Enrolled Agent in your area is http://taxexperts.naea.org/
2. Check on the preparer’s history. Check to see 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 Professional Responsibility.
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, always 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 prepares and files more than 10 returns for clients must file the returns electronically, unless the client opts to file a paper return. More than 1 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. Make 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. Before you sign 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; Form 3949-A, Information Referral (PDF 94K). Or directly contact The Office of Professional Responsibility (OPR). Also be sure to check out – Where Do You Report Suspected Fraud Activity?
Podcast: Choosing a Tax Preparer