January 5, 2009
It's tax time again, and considering the complexity of the tax code, a growing number of taxpayers seek help in filing their returns. Here's some advice from the Internal Revenue Service — may sure you pick someone who knows what they're doing. Otherwise, it's you who could end up in hot water.
In fact, the IRS says you should choose your tax preparer as carefully as you would a doctor or lawyer. Even when someone else prepares your tax return, you, the taxpayer, are ultimately responsible for all the information on the return.
For that reason, you should thoroughly review the completed return before signing it and ask questions on entries you don't understand. And it should go without saying, never sign a blank tax form.
Most tax return preparers provide honest service to their clients, the IRS says, but it's always a good idea to be careful. When seeking someone to prepare your tax returns, there are several red flags that should alert you that you could be venturing onto thin ice:
• Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.
• Avoid preparers who base their fee on a percentage of the refund.
• Use a tax professional who signs the completed tax return and provides you a copy.
• Consider whether the individual or firm will be around to answer questions months, or even years, after the return has been filed.
• Check credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
• Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and holds them to a code of ethics.
• Ask friends and family whether they know anyone who has used the tax professional and whether they were satisfied with the service they received.
Reputable preparers will ask to see receipts and other documentation and will ask numerous questions to determine whether expenses, deductions and other items qualify. By doing so they are trying to help you avoid penalties, interest or additional taxes that could result from an IRS audit.
