(COLORADO) — The Internal Revenue Service (IRS) is reminding taxpayers that choosing the right tax professional is vital to helping them avoid tax-related identity theft and financial harm.
The IRS said while most tax return preparers are trustworthy and provide high-quality service, some engage in fraud, identity theft, and scams. Taxpayers are legally responsible for the accuracy of their income tax returns.
The IRS warned against “ghost” preparers or tax preparers who won’t sign the tax return as the paid preparer and ask the taxpayer to sign and file the return themselves, these preparers should be avoided as the IRS said this behavior indicates fraud.
IRS shared tips for choosing the right tax preparer:
Look for a preparer who’s available year-round. Questions may come up about a tax return after filing season ends and it’s helpful to contact the preparer when needed.
Review the preparer’s history using the Better Business Bureau website. Look for disciplinary actions and the license status for credentialed preparers. For CPAs, check the State Board of Accountancy’s website, and 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 IRS Directory of Federal Tax Return Preparers.
Discuss service fees upfront. Avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own accounts. Be wary of those who claim they can get larger refunds than their competitors.
Find an authorized IRS e-file provider. They are qualified to prepare, transmit, and process e-filed returns. Filing electronically and choosing direct deposit can result in faster refunds, often within 21 days.
Provide records and receipts. Trustworthy preparers will request proper documentation and ask questions to determine the client’s total income, deductions, tax credits, and other relevant details. 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 the preparer’s credentials and qualifications. 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 prepare and sign the tax return.
Never sign a blank or incomplete return. Taxpayers are responsible for filing a complete and correct tax return.
Review the tax return carefully before signing it. Be sure to ask questions if something is not clear or appears inaccurate. Any refund should go directly to the taxpayer – not to the preparer’s bank account. Review the routing and bank account number on the completed return and make sure it’s accurate.
The IRS advises taxpayers to understand who they’re hiring and ask the right questions before handing over their sensitive personal and financial information. The IRS offers resources to help taxpayers make informed decisions. The IRS has a database of federal tax return preparers with credentials and select qualifications and a dedicated page to offer help in choosing a tax preparer.
The IRS offers free filing options to file taxes electronically, the IRS website lists eligibility requirements for free filing, and trusted partner sites to assist with the filing process.
