Tax preparers are supposed to help you navigate the complex world of tax returns and tax laws, not steal your money.
While most preparers provide “honest, high-quality” service, there are some who are dishonest and unscrupulous, the IRS said Tuesday. They will engage in refund fraud, identity theft and other illegal scams that can hurt you.
“We see bad actors every year that steal from their clients or compromise returns in ways that can severely harm taxpayers,” said IRS Commissioner John Koskinen in a statement.
Roughly 60% of tax filers use tax return preparers. If you’re among them, the IRS recommends you choose carefully.
Make sure they have an IRS Preparer Tax Identification Number (PTIN) for 2015. This certifies the person is authorized to prepare federal tax returns.
Check to see if the preparer has any special credentials. Some preparers may be certified public accountants, attorneys or enrolled agents (EA). An EA is certified to represent you before the IRS. Some belong to professional tax organizations, or have completed continuing tax education courses to keep current on the latest changes in tax law. For instance, this year all tax preparers should be up to speed on all the ways the Affordable Care Act provisions might affect clients’ tax situation.
Don’t use someone who bases his fee on the size of your refund. And always have your refund sent directly to you or your bank account. Never have the IRS deposit it directly into your tax preparer’s bank account.
Work with preparers who can e-file your return. Tax professionals who prepare more than 10 returns must be able to file returns electronically, which is the safest and most accurate way to file, according to the IRS.
Pick a preparer who will be available after April 15. You need to know you can contact your preparer after your return is filed should questions arise.
Avoid preparers who don’t ask to see your records and receipts. They need to verify what you tell them, and you need to have proof of anything the preparer puts on your return. Avoid anyone who says he can just file your return using your last pay stub instead of your official W-2 form from your employer.
Also steer clear of someone who encourages you to make up expenses or claim tax breaks you know you’re not eligible for and can’t back up with records.
Don’t sign a blank or incomplete return. You’re legally responsible for all the information on your return. So you have to review everything on it and get any questions you have answered or errors corrected before signing it. Don’t just trust your preparer to take care of everything without your oversight.
Make sure the preparer signs the return and gives you a copy. A paid preparer is required to sign her name and include her PTIN on your return. She should also give you a copy of the completed return sent to the IRS.
If you think you’ve been scammed by a tax preparer, report it to the IRS by filling out two forms: Form 14157, which registers your complaint; and Form 14157-A, if you suspect the preparer filed or changed your return without your consent.