Since the majority of consumers take advantage of e-filing, tax preparation fraud is at an all-time high. Although your personal information is at risk if you use the Internet at all (because it is basically floating around in Cyberspace), your risk increases exponentially if you fail to practice due diligence when selecting an accounting firm. Beware that nearly anyone can hang a shingle or put up a quick website, offering to inexpensively do your taxes and maximize your refund. I’m glad dogs don’t have to file taxes. Sounds like a big headache!
IRS Commissioner John Koskinen warns taxpayers, “Filing a tax return can be one of the biggest financial transactions of the year, so taxpayers should choose their tax return preparers carefully. Most tax professionals provide top-notch service, but we see bad actors every year that steal from their clients or compromise returns in ways that can severely harm taxpayers.”
Since about 60 percent of people file returns prepared by an official agent, reputable tax preparation firms are a vital part of the U.S. tax system. But it is important to note that taxpayers are legally responsible for what is on their tax return even if it is prepared by someone else. So make sure the preparer you hire is up to the task. In other words, you won’t be able to blame your tax preparer if your forms are messed up. So pay attention, people!
If you plan to hire someone to file for you, minimize your risk of fraud, by applying these 10 tips when choosing a tax preparer:
1. Make sure your preparer has an IRS Preparer Tax Identification Number (PTIN). Anyone with a valid 2015 PTIN is authorized to prepare federal tax returns. Ensure the preparer signs and includes their PTIN with your completed return.
2, Ask to see credentials. Although professional certification is not necessary, your preparer should be either an enrolled agent, certified public accountant, attorney, belong to a professional organization, or attend continuing education classes. A number of tax law changes, including the Affordable Care Act provisions, can be complex. So only a competent tax professional will be up-to-date in such matters. Tax law is complicated. So it makes sense to hire someone who knows what they are doing.
3, Check about service fees upfront. Avoid preparers who base theirs fee on a percentage of your refund. Also, steer clear of anyone who says they can get you a larger refund than others. If your taxes are prepared properly and honestly, your refund will be the same no matter who prepares it. Although I’m glad I don’t have to file taxes, I wish I could somehow qualify for a refund. Then I could get more doggie treats!
4, Designate refunds to be sent to you or deposited directly into your bank account. Don’t allow funds to be deposited into a preparer’s bank account. Or, if you prefer, send them straight to me.
5. Make sure your preparer offers IRS e-file and request your return be submitted to the IRS electronically. Doing so is the safest and most accurate way to file a return, whether you do it alone or pay someone to prepare and file for you.
6. Make sure the preparer will be available in case you have questions. You should be able to contact the tax preparer after you file your return – even after the April 15 due date. In other words, avoid fly-by-night places that pop up and close down right after the tax deadline.
7. Provide records and receipts. Qualified preparers will ask to see your records and receipts. They will also ask questions to determine your total income, deductions, tax credits and other items. Do not rely on a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2, which is against IRS e-file rules.
8. Don’t sign an incomplete or blank return. This seems pretty basic. But you might be surprised.
9. Review your return before signing. Make sure you’re comfortable with the accuracy of the return before you sign it.
10. Report abusive tax preparers to the IRS. You can report abusive tax return preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer, which is available at IRS.gov.
To find other tips about choosing a preparer, better understand the differences in credentials and qualifications, and learn how to submit a complaint regarding a tax return preparer, visit Irs.gov/ChooseATaxPro.
We hope that this blog post will help you take steps to be safe during tax time and all year long. A convenient and affordable way to make sure you are prepared for disasters and emergencies of virtually every kind is to subscribe to the RJWestmore Training System by Universal Fire/Life Safety Services, which has been designed to help improve and save lives. Visit RJWestmore.com to read about the many ways proper planning can make a difference in numerous aspects of your professional and personal life.