The IRS has issued its fact sheet on return preparer fraud. It includes the following "helpful hints when choosing a return preparer."
* Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.
* Avoid preparers who base their fee on a percentage of the amount of the refund.
* Use a reputable tax professional who signs your tax return and provides you with a copy for your records.
* Consider whether the individual or firm will be around to answer questions about the preparation of your tax return months, or even years, after the return has been filed.
* Review your return before you sign it and ask questions on entries you don't understand.
* No matter who prepares your tax return, you, the taxpayer, are ultimately responsible for all of the information on your tax return. Therefore, never sign a blank tax form.
* Find out the person’s credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents can represent taxpayers before the IRS in all matters including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
* Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
* Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?
These are perfectly good tips, as far as they go. Yet there are other warning signs. So here are the Tax Update's additional helpful hints when choosing a return preparer:
- It's a bad sign when you ask what your refund will be and the preparer asks, "how much do you need?"
- Use caution when the preparer says she still uses 1997 tax forms because 1997 was her favorite cell.
- You can only make appointments with the preparer during visiting hours.
- Be cautious of tax preparers who claim they are larger than other preparers.
- Avoid preparers who insist that the IRS requires your ATM PIN and your Visa Card number on your return.
- Find out if the preparer is affiliated with a professional organization that provides its members with lists of countries without extradition and holds them to a code of silence.
- Be cautious when the preparer says he has to meet you at a highway rest stop because of the 2000-yard limit.
- Beware of a preparer who asks "do you want her to love you more than any other guy?"
- Avoid a preparer who doesn't offer electronic filing, but says telepathic filing is better anyway.
- Look elsewhere if, when you call his references, Wesley Snipes picks up the phone.
The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to