Finding the Best Tax Preparer
Finding the best tax preparer can seem daunting, but it’s an important task to ensure that your taxes are prepared accurately and efficiently. Having a good and experienced tax preparer can be the difference in ensuring your taxes are done properly and preventing future issues.
A skilled and experienced tax preparer can help individuals and businesses maximize their deductions and minimize any tax liabilities. A good preparer may also be able to help you prepare for the following year about what additional steps can be taken to improve your tax position.
What Happens With a Bad Preparer
Many individuals seek out the tax preparer that promises the highest tax refund, but that may be the worst way to choose a tax preparer. Unscrupulous tax preparers may use incorrect or fake deductions to help people obtain a large refund. This refund can be a temporary windfall but will cost you a significant amount more in the long run.
Fraudulent returns are flagged two to three years later after the refund is issued and after the IRS has had time to review the return. At that time, the IRS will request verification and evidence for any deductions that you took. If you cannot provide the correct documentation, then the IRS will require repayment of any overage of refund, plus penalties and interest. If the deductions result in a high enough change in your taxable income, the IRS will likely access an Accuracy-Related Penalty of 20% for the underpayment of tax that was understated on the return (this is in addition to the normal interest and penalties for not paying the taxes in regular course).
Remember, you are responsible for all the information on the tax return, even if you are not the preparer. It is critical that you review your tax return and understand what information is in it. The IRS will hold you responsible for the return, even if it was fraudulently prepared by a tax preparer. Additionally, many people cannot find the sketchy tax preparers years later when you need help defending your tax return years later.
Here are a few tips for finding the best tax preparer for your needs:
- Ask for recommendations from trusted sources. Personal recommendations from friends, family, or colleagues can be a good way to find a reputable tax preparer. It is important to remember that just because a coworker or family member says that their preparer gets them a large refund every year means that the preparer is good or even doing things legally. Unfortunately, in our practice we have seen many people who were referred to someone and that preparer created fraudulent information on the return that later came back to bite the taxpayer once the Internal Revenue Service or state taxing authority caught on.
- Check for professional credentials. A good tax preparer should have a Preparer Tax Identification Number (PTIN) and may also have professional certifications, such as being an Enrolled Agent, licensed attorney, or a Certified Public Accountant (CPA). These credentials indicate that the preparer has passed a competency exam and is up-to-date on tax laws. The IRS has a website function that can show you all credentialed individuals in your area that can prepare your return.
- Look for someone with experience. Consider a tax preparer who has been in business for a number of years and has experience preparing taxes for people in similar financial situations as your own. Use the internet as a tool. Look for those that have websites listing their experience and credentials. Google and Yelp reviews can tell a lot about a business. Look at the negative and positive reviews with equal weight.
- Be cautious of preparers who base their fee on a percentage of your refund or who claim they can get larger refunds than other preparers. These types of preparers are usually more interested in getting a larger fee for themselves rather than preparing your taxes accurately. These prepares will use illegal means to get your taxable income as small as possible or give you tax credits that you may not be eligible for (and likely will have to pay back later). Be wary of “pop-up” shops that show up in February and then are gone by the end of April.
- Consider the preparer’s availability. If you have a complicated tax situation, you may want to work with a preparer who is available year-round in case you have questions or need to provide additional information. Businesses should look into someone that they can form a lasting relationship with. For a business to jump to different preparers every year can only cause problems since businesses tend to have more complicated returns.
- Schedule a consultation. Meeting with a few different tax preparers can give you a sense of their personality and allow you to ask questions about their qualifications and experience. This can help you find the right fit for your needs. Getting second opinions on something that may be more complicated in your situation is also something to consider.
By following these tips, you can find a tax preparer who is qualified, experienced, and a good fit for your needs. Don’t be afraid to shop around and ask questions – finding the best tax preparer can help ensure that your taxes are prepared accurately and efficiently. It is about making sure your return is done properly, not about the size of your refund.
If you are a victim of a bad tax preparer, you should report the tax preparer to the IRS. At the end of the day you are still responsible for any changes to correct the turn, but reporting the bad conduct can prevent the problem happening to others in the future.
Get some local help with tax debt
Attorney Arthur Rosatti regularly helps individuals and businesses with outstanding IRS and state tax debt. If you are owing the IRS, either through a a year with higher than excepted income, under withholding, a bad tax preparer, an audit or any other reason, he can advise you on your options to deal with your tax debt. As a licensed attorney, he authorized to practice in front of the Internal Revenue Service and many state taxing authorities.