The Internal Revenue Service (IRS) urges taxpayers to exercise caution when selecting tax professionals to prepare their returns. While most tax preparers offer honest and high-quality services, the IRS warns that some individuals may engage in fraudulent activities, identity theft, and scams that could compromise personal and financial information.
One crucial point emphasized by the IRS is that taxpayers are legally responsible for the accuracy of their income tax returns, regardless of who prepares them. To assist individuals in making informed choices, the IRS has established a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. Additionally, a dedicated page on IRS.gov guides you in choosing a tax professional and recommends individuals affiliated with recognized national tax associations.
Taxpayers should be aware of several red flags and warning signs when selecting a tax preparer. One such indicator is the failure of a preparer to sign the tax return, a practice commonly associated with untrustworthy “ghost” preparers. These individuals may print the return, have the taxpayer sign it, and then mail it to the IRS. A ghost preparer may refuse to digitally sign the document for electronically filed returns, posing potential taxpayer risks.
Another warning sign is the use of refund-linked fees. Taxpayers are advised to steer clear of preparers who base their fees on a percentage of the refund or offer to deposit it into their financial accounts. Claims of obtaining larger refunds than competitors can also signal unethical practices.
The IRS provides vital tips for choosing a tax return preparer to ensure a secure and reliable service. Taxpayers are advised to select available preparers year-round, especially if questions arise after the filing season. Checking the preparer’s history through the Better Business Bureau, State Board of Accountancy, or State Bar Association can provide valuable insights into their credibility.
Avoiding preparers who base fees on refund percentages and claim to outperform competitors in securing larger refunds is also crucial. An authorized IRS e-file provider is recommended for faster and more secure processing of electronic returns. Reputable preparers ask to see and review necessary documents, ensuring compliance with IRS e-file rules.
Understanding the credentials and qualifications of the preparer is another essential aspect. Attorneys, CPAs, and enrolled agents can represent clients before the IRS in any situation. Finally, taxpayers are advised only to sign a complete return and to thoroughly review it before signing it. Ensuring that any refund goes directly to the taxpayer, not the preparer’s account, is also emphasized.
The IRS provides a reporting mechanism for those encountering misconduct by tax preparers using Form 14157, Complaint: Tax Return Preparer. Suspected fraudulent filing or alterations to a tax return can be reported using Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.
In conclusion, the IRS underscores the importance of due diligence in selecting tax professionals to protect personal and financial information during tax preparation.
Source (IRS News).
