Millions of taxpayers in the United States go to tax preparers to report to the Internal Revenue Department, better known as the IRS. Before going to the places where taxes are being prepared, it is important to do some research. You cannot just meet anyone to prepare your taxes for you. The information you share with the preparer usually includes personal details and confidential information, such as your marital status, your salary or salaries depending on the number of jobs you have and many details about your personal finances. The last thing you want is for your personal and business information to end up in the wrong hands. Most tax return preparers are known to be honest, very professional and provide excellent service to their clients. Some would even bring suggestions that would help you in the long run. However, there are also dishonest and unscrupulous tax return preparers who file false income tax returns. You should always check your return for errors to avoid potential financial and legal problems. It is very advisable to choose a Tax preparer that you can easily get in contact with just in case anything goes wrong or if the IRS examines your tax return and have questions concerning how it was prepared.

LEARN BEFORE YOU CHOOSE TAX PREPARERS

The IRS recommends taxpayers to always be cautious in their choice. This is because each taxpayer, and not the preparer, is responsible for the information included in the tax return. If anything illegal were to be found, it will be traced back to the taxpayer and he or she would face the consequences. If you go to a preparer who does not have the necessary credentials or preparation to file taxes, there are no guarantees that they will do a good job.
There are also abusive tax preparers who include incorrect information in the returns and tell lies just so they can charge their customers more. In some cases, they claim refunds or deductions for which they don’t really qualify. This incorrect information could bring many unnecessary problems to the taxpayer.
To avoid problems like these, it’s important to follow three important steps before hiring a tax preparer.

THREE STEPS TO TAKE BEFORE HIRING TAX PREPARERS

1. Understand the different levels of tax preparers

Just like all other professions, there are several levels of tax preparers. The three most common are: Registered Agents, Certified public accountants and Lawyers. The three types of taxpayers above are IRS accredited with intense training so they are very reliable. Other preparers who are NOT IRS-accredited but who can prepare tax returns include: Community volunteers and anyone who has an active tax preparer or PTIN number.

Registered Agents: Registered agents, who are called “enrolled agents,” are people authorized by the IRS to prepare taxes. They have to pass a series of exams and take refresher courses every three years. These preparers must be proficient in planning federal taxes and preparing individual and business tax returns.
Certified public accountants: Certified public accountants are professionals who have passed an exam with your state’s Bar of Accountants. Additionally, they earned a bachelor’s degree in accounting from college and have to constantly study and pass exams to keep their license active.
Lawyers: Attorneys are licensed to practice law by your state’s Bar Association. Some attorneys specialize in tax preparation.
Community volunteers: These preparers are generally not registered agents, CPAs, or attorneys. In general, these are volunteers who have completed a series of courses to train them to perform tax returns competently. Every year they register with the IRS and update their tax preparer or PTIN number.
People with a PTIN number: Finally, there are people who do not have professional tax preparation credentials, are not attorneys or accountants, but have an active IRS Preparer Tax Identification Number (PTIN). With this last type of tax preparers, this is where you have to be more careful.

Many of these preparers have experience. But others may not have enough experience and training to do your taxes. Consider all of your options and learn about the different levels of tax preparers before hiring one. It will also help to know that in order to charge for the tax preparation service, all preparers must have a PTIN number.

2. Consult the IRS Directory of Accredited Tax Preparers

Since we are familiar with the different levels of tax preparers, it is important to verify that they appear in the IRS Directory of Federal Tax Preparers. The Directory provides a list of preparer searches to choose from.

3. Verify the preparer’s accreditations before hiring him

If the preparer does not appear in the IRS directory, but has a PTIN number, he can do your taxes. However, it is advisable to research first if you have experience preparing taxes.
Be very careful who you choose and consider the level of experience they have. Give priority to tax preparers who are registered people, certified public accountants, or attorneys. It is better to know that you hired someone who is accredited by the IRS, than to remain in doubt about the legitimacy of the tax preparer.

OTHER TIPS TO KNOW WHEN SELECTING A PREPARER

Check the preparer’s history

Check with the Better Business Bureau (BBB) about the preparer. Inquire about disciplinary reprimands and the condition of the registered preparer’s license. For certified public accountants, check with the State Board of Accountancy. For attorneys, contact the State Bar Association. For Registered Agents, visit IRS.gov and search for “check the status of registered agents” or check them in the directory.

Ask them about service fees

Avoid preparers who base their fees on a percentage of the refund or who have higher refunds than their competition. When inquiring about a preparer’s services and fees, do not provide tax documents, Social Security numbers, or other information.
Ask that your return be sent by Electronic-File – Taxpayers must ensure that their preparer offers the IRS electronic service. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit. The refund will be gotten in less than 3 weeks.
Make sure the preparer is reachable – Taxpayers may need to contact their preparer after the deadline may have passed so avoid ghost tax preparers as much as possible.

Provide records and receipts

Good preparers will ask to see taxpayer records and receipts. They will ask questions to calculate things like total income, tax deductions, and credits.

Never sign a blank statement

Never use a tax preparer who asks a taxpayer to sign a blank tax form. Always check before signing – Before signing a tax return, review it. Ask questions if something is not clear. Taxpayers should be comfortable with the accuracy of their return before signing it. They should also make sure that their refund goes directly to them, not to the preparer’s bank account. Review the routing number and bank account on the full l statement. The preparer must give you a copy of your tax return.

Make sure the preparer signs and includes their PTIN

All paid tax preparers must have a Preparer Tax Identification Number. By law, paid tax preparers must sign statements and include their PTIN.

Report abusive tax preparers to the IRS

Taxpayers should report abusive tax preparers and suspected tax fraud to the IRS by using the Form 14157, Complaint: Tax Preparer. If the taxpayer suspects that a preparer filed or changed his return without his consent, he should also file Form 14157-A, Preparer Misconduct Affidavit.

In essence, it is important for taxpayers to educate themselves about what is required from both the tax preparers and the taxpayers themselves so that there would be a smooth filing of tax returns without facing any issues.