The IRS emphasizes the importance of hiring a trustworthy tax professional to protect personal and financial information. To avoid fraud and scams, taxpayers should choose their preparers carefully. Understanding the preparer’s credentials and asking relevant questions is critical, as taxpayers are still legally responsible for the accuracy of their tax returns.
The IRS provides resources like the Directory of Federal Tax Return Preparers and a dedicated page on IRS.gov to help taxpayers find qualified professionals. Individual needs will determine the most appropriate type of preparer.
Warning Signs to Look Out For
There are warning signs that can help taxpayers avoid unethical tax return preparers. For example, failure to sign a tax return indicates that a paid preparer is unlikely to be trusted. They may be attempting to make a quick profit by promising a large refund or charging fees based on the size of the refund.
These fraudulent “ghost” preparers frequently print the return, have the taxpayer sign it, and mail it to the IRS. A ghost preparer will complete the tax return but refuse to digitally sign it as the paid preparer. Taxpayers should avoid using this type of unethical preparer.
Furthermore, taxpayers should only hire a tax professional who has a valid Preparer Tax Identification Number. Anyone who is paid to prepare or assist in the preparation of federal tax returns is required by law to have a valid PTIN. Paid preparers must sign and include their PTIN on all tax returns they prepare.
Other Tips
When selecting a tax preparer, consider the following tips:
- Make sure the preparer is available year-round for questions beyond the filing season.
- Investigate the preparer’s history, including any disciplinary actions or license status, using resources such as the Better Business Bureau or relevant professional associations.
- Inquire about service fees, and avoid preparers who charge fees based on refund percentages or offer to deposit refunds into their own accounts.
- Select an authorized IRS e-file provider for faster processing and refunds via direct deposit.
- Provide all necessary records and receipts to the preparer, and avoid those who file returns with pay stubs rather than official documents such as Form W-2.
- Understand the preparer’s qualifications, as different professionals have varying abilities to represent clients before the IRS.
- Never sign a blank or incomplete return; instead, thoroughly review the completed return before signing.
- Confirm that any refund is deposited directly into your account and not the preparer’s.
- Report any misconduct or fraudulent activity by the preparer to the IRS using the appropriate forms (Form 14157 or Form 14157-A) if necessary.
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