Hiring a tax preparer takes the burden of preparing a return off your shoulders, but it does not remove the burden of responsibility. The government will hold you responsible for the information that you share on your return, not the preparer. That is why it is very important to choose a return preparer wisely and also to review your return for accuracy.
When hiring a tax return preparer, keep these tips in mind:
- Check the PTIN of the preparer. Every professional tax preparer is legally required to have a Personal Tax Identification Number (PTIN). Check whether the preparer has a valid 2015 PTIN. Tax return preparers have different qualifications, skill and areas of expertise. It is important to check their “representation rights”.
- A return preparer can be an enrolled agent, Certified Public Accountant (CPA) or a tax attorney. However, it is not necessary that a return preparer be any of the above. A return preparer must have followed the continuing education requirements and must be up-to-date with the tax laws, including the provisions of the Affordable Care Act (ACA).
- Never hire preparers that ask for fee based on the percentage of your refund. It is a sure sign of fraud.
- Your refund must be sent directly from the IRS to your bank account. Never agree to send your refund to the preparer’s bank account.
- Check if your preparer can file your return using IRS e-file. Any tax preparer that files more than 10 returns must file the returns electronically. E-file is the safest and the fastest way to file returns.
- Note the contact details of the preparer so that you can contact them after the filing, if you need to.
- Never sign a return before the preparer has completed all information on it. Review the information before signing for accuracy. The preparer must give you a copy of the return.
- Check the PTIN on the return. Return preparers are required to put their PTIN on every tax return they prepare.
- Provide all records and receipts. An honest preparer will ask you for all required documents to determine your total income, deductions, credits, etc. The preparer must follow IRS procedures such as using Form W-2 rather than your last pay stub when e-filing your return.
- Lastly, report fraudulent tax return prepares to the IRS by using Form 14157, Complaint: Tax Return Preparer or Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.