Choosing a Tax Professional

When it comes to filing your income tax return, it is important to choose a tax professional who is skilled, trustworthy, and capable of accurately preparing and filing your taxes. After all, you are entrusting them with your most personal and sensitive financial information, such as your income, marriage status, children, and social security numbers. In this article, we will provide you with information on the different types of tax return preparers, tips for choosing a tax preparer, how to avoid unethical preparers, and what to do if you have a complaint about a tax preparer.

Types of Tax Return Preparers

There are various types of tax return preparers available, each with different levels of skills, education, and expertise. Here are some of the common types of tax return preparers:

1. Certified Public Accountants (CPAs): CPAs are professionals who have passed the Uniform CPA Examination and have met the education and experience requirements set by their state board of accountancy. They have a deep understanding of tax laws and regulations.
2. Enrolled Agents (EAs): EAs are individuals who have passed a comprehensive examination administered by the IRS. They are licensed to represent taxpayers before the IRS and have expertise in tax matters.
3. Attorneys: Attorneys who specialize in tax law can also provide tax preparation services. They have a thorough understanding of tax laws and can provide legal advice if needed.
4. Other Preparers: There are also many tax return preparers who do not have a professional credential. While they may not have the same level of expertise as CPAs, EAs, or attorneys, they can still provide tax preparation services.

Tips for Choosing a Tax Preparer

Choosing the right tax preparer is crucial to ensure accurate and reliable tax preparation. Here are some tips to help you make an informed decision:

1. Verify Credentials: Before hiring a tax preparer, check if they have an IRS Preparer Tax Identification Number (PTIN). This is a requirement for anyone who prepares tax returns for compensation. You can also use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to find preparers in your area who hold professional credentials recognized by the IRS.
2. Research Qualifications: Look for tax preparers who have relevant qualifications and experience. Consider their education, training, and any certifications they may hold. The IRS provides resources to help you learn about tax preparer credentials and qualifications.
3. Check Professional Organizations: Many tax preparers belong to professional organizations such as the American Institute of Certified Public Accountants (AICPA) or the National Association of Enrolled Agents (NAEA). Membership in these organizations can indicate a commitment to professional standards and ongoing education.
4. Ask for Referrals: Seek recommendations from friends, family, or colleagues who have had positive experiences with tax preparers. Personal referrals can be a valuable source of information.
5. Interview Potential Preparers: Schedule consultations with potential tax preparers to discuss your tax situation and gauge their knowledge and expertise. Ask about their experience with similar tax situations and how they stay up-to-date with tax laws and regulations.
6. Understand Fees: Inquire about the fees charged by the tax preparer and how they are calculated. Avoid preparers who base their fees on a percentage of your refund, as this may create a conflict of interest.
7. Review the Tax Return: Before signing and filing your tax return, carefully review it for accuracy and completeness. Make sure you understand all the information included in the return.

Avoiding Unethical Preparers

Unfortunately, some taxpayers are financially harmed each year due to unethical tax return preparers. To avoid falling victim to such scams, consider the following tips:

1. Be Wary of "Ghost" Preparers: Ghost preparers are individuals who do not sign the tax returns they prepare. They may also refuse to provide their PTIN. These preparers often promise large refunds and charge a percentage of the refund as their fee. Always ensure that your tax preparer signs your return and includes their PTIN.
2. Research Preparers: Before hiring a tax preparer, conduct a background check. Look for any complaints or disciplinary actions against the preparer. You can contact your state's board of accountancy, state bar association, or the IRS Office of Professional Responsibility for more information.
3. Avoid Promises of Large Refunds: Be cautious of preparers who guarantee large refunds without thoroughly reviewing your financial information. Remember, if something sounds too good to be true, it probably is.
4. Review Your Return: Take the time to carefully review your tax return before it is filed. Ensure that all the information is accurate and that you understand the deductions, credits, and other entries made on your behalf.

Reporting Complaints

If you have been financially impacted by a tax return preparer's misconduct or improper tax preparation practices, it is important to report your complaint. The IRS is committed to investigating paid tax return preparers who act improperly. Here's what you can do:

1. Make a Complaint: File a complaint with the IRS by completing Form 14157, Complaint: Tax Return Preparer. Provide as much detail as possible about the preparer's actions and how you were affected.
2. Seek Legal Advice: If you believe you have suffered financial harm due to a tax preparer's negligence or misconduct, you may want to consult with an attorney who specializes in tax law. They can provide guidance on your legal options.

Remember, choosing a reputable and qualified tax professional is essential to ensure accurate and reliable tax preparation. Take the time to research and interview potential preparers to find the one who best meets your needs.