Currently, the IRS has no mandatory testing or education requirements for paid tax preparers, which leaves the door wide open for preparer fraud. Some states, like California, have implemented stipulations that must be met to legally prepare taxes for a fee. I highly recommend going online to search the requirements for your state. If your state has similar requirements, your preparer’s name should be listed in good standing on their website.
If an error is found on your tax return, the IRS holds you responsible for the information provided and for any penalties accessed. Choosing your tax preparer is similar to choosing a hairstylist or barber…you want someone who comes highly recommended by those you trust, makes themselves available for appointments year round, and handles everything you share with complete discretion. You’re sharing all your personal and sensitive information with this person, so be suspicious if you find the following in your preparer this tax season…
- They won’t sign the return
- You aren’t given a copy of your return
- You’re charged based on a percentage of your refund
- They can’t show you proof of their credentials
- They’re unavailable throughout the year to answer your questions
- They aren’t continuing their education during the year and staying current on tax law changes
- They didn’t use a PTIN at the bottom of your 1040 (a Preparer Tax Identification Number is an IRS requirement)