IRS
WASHINGTON
– The Internal Revenue Service today reminded taxpayers to choose a tax
return preparer with care. Even though the vast majority of tax return
preparers provide honest, quality service, some cause great harm through
fraud, identity theft and other scams every year.
People value good tax return preparers for helping them through a
complicated tax situation or for being available when they don’t have
time to prepare their own tax return. Paid tax return preparers
completed more than half of the tax returns submitted to the IRS in
tax-year 2018.
It’s very important to select the right tax professional. After all,
people trust them with their most sensitive personal and financial
information. No matter who prepares it, the accuracy of a tax return is
ultimately the responsibility of the taxpayer. The IRS protects
taxpayers by assessing significant civil penalties against dishonest
return preparers and working with the Justice Department to end scams
and prosecute the criminals behind them.
What to look for
The Choosing a Tax Professional page on IRS.gov has information about tax return preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification.
By law, anyone who is paid to prepare or assists in preparing most federal tax returns must have a valid Preparer Tax Identification Number, or PTIN.
Paid preparers must sign and include their PTIN on the return. Not
signing a return is a red flag that the paid preparer may be looking to
make a quick profit by promising a big refund or charging fees based on
the size of the refund.
Well-intentioned taxpayers can be deceived by preparers who don’t
understand taxes or who mislead people into taking credits or deductions
they aren’t entitled to claim. Fraudulent preparers often do this to
increase their fee. Here are more tips to consider:
- Look for a preparer who is available year-round. In the event
questions come up about a tax return, taxpayers may need to contact the
preparer after the filing season is over.
- Inquire whether the tax return preparer has a professional
credential (enrolled agent, certified public accountant or attorney),
belongs to a professional organization or attends continuing education
classes. Because tax law can be complex, competent tax return preparers
remain up to date on tax topics. The IRS website has more information
regarding national tax professional organizations.
- Check the preparer’s history. Check the Better Business Bureau
website for information about the preparer. Look for disciplinary
actions and the license status for credentialed preparers. For CPAs,
check with the State Board of Accountancy. For attorneys, check with the
State Bar Association. For Enrolled Agents, go to IRS.gov and search
for “verify enrolled agent status” or check the Directory.
- Ask about service fees. Avoid preparers who base fees on a
percentage of their client’s refund or boast bigger refunds than their
competition. Don’t give tax documents, Social Security numbers or other
information to a preparer if merely inquiring about their services and
fees. Unfortunately, some unscrupulous preparers have used this
information to improperly file returns without the taxpayer’s
permission.
- Provide records and receipts. Good preparers ask to see these
documents. They’ll also ask questions to determine the client’s total
income, deductions, tax credits and other items. Do not hire a preparer
who e-files a tax return using a pay stub instead of a Form W-2. This is
against IRS e-file rules.
- Understand representation rules. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent taxpayers in limited situations if they prepared and signed the tax return.
- Never sign a blank or incomplete return.
- Review the tax return before signing. Be sure to ask questions if
something is not clear or appears inaccurate. Any refund should go
directly to the taxpayer – not into the preparer’s bank account.
Reviewing the routing and bank account number on the completed return is
always a good idea.
- Report abusive tax preparers to the IRS. Use Form 14157, Complaint: Tax Return Preparer PDF. If a return preparer is suspected of filing or changing the return without the client’s consent, also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit PDF. Forms are available on IRS.gov.
- IRS.gov/chooseataxpro
has additional information to help taxpayers including tips on choosing
a preparer, the differences in credentials and qualifications, as well
as how to submit a complaint regarding an unscrupulous tax return
preparer.
Start early; ask for phone or virtual help
It is advisable to start searching for a tax return preparer as soon
possible. This allows for more time to do research and get
recommendations. Remember, taxpayers must pay any taxes due by April 15,
even if an extension is necessary.
Be sure to check with the tax return preparer to see if there are any
restrictions or additions to the services they provide because of the
COVID-19 pandemic. Some may offer phone or virtual assistance options in
addition to their usual in-person services. Customers may be asked, for
example, to mail documents to them or scan and e-mail documents through
a secure internet connection.
Taxpayers can find answers to questions, forms and instructions and
easy-to-use tools online at IRS.gov. They can use these resources to get
help when it’s needed, at home, at work or on the go.
This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax (For Individuals).