What You Should Know When Choosing a Tax Professional

When tax season comes around, many taxpayers turn to tax professionals to help them prepare their federal tax return. However, choosing a tax preparer requires careful consideration.

Although most tax return preparers provide quality service, some are unreliable or even fraudulent.

Remember, you, the taxpayer, are ultimately responsible for all the information on your income tax return, regardless of who prepares it.

Here’s a guide to help you navigate the process of selecting a tax preparer.

Tips for Choosing a Tax Professional

According to the IRS, when selecting a tax return preparer, keep the following tips in mind:

• Verify and confirm: Understand the tax preparer’s credentials and qualifications and review their history for complaints or disciplinary actions.
• Ask about service fees upfront: Avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own financial accounts.
• Year-round availability: Look for a preparer who’s available year-round to answer questions even after filing season is over.
• Offers IRS e-file: The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit.

Tax preparation involves much more than just filling out forms; it requires a deep understanding of tax laws and meticulous attention to detail.

Tax Preparation Safeguards

The IRS also recommends that taxpayers watch out for questionable actions that can identify a fraudulent person posing as a tax preparer.

• Provide records and receipts. Good preparers ask to see these documents to help ensure that all eligible deductions and credits are claimed.
• Never sign a blank or incomplete return. Taxpayers are responsible for filing a complete and correct tax return.
• Review and Ask Questions. Review the entire tax return before signing it. Be aware of tax rules and deductions and and ask questions if something is not clear or appears inaccurate.
• Know where the refund is deposited. Make sure any refund will go directly into your bank account – not into the preparer’s bank account. Do this by verifying the routing and bank account number on the completed return.
  

Warning Signs of “Ghost” Tax Preparers

A “ghost” tax preparer is someone who doesn’t sign your tax return or who doesn’t have valid identification.

By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number (PTIN).

Paid preparers must sign and include their PTIN on any tax return they prepare.

• Not signing a return is a red flag
• Watch out for tax preparers who promise a big refund
• Some fraudsters are looking to make a quick profit by charging fees based on the size of the refund

Taxpayers should avoid these unethical “ghost” tax return preparers.

If a fraudster “ghost” tax preparer incorrectly manipulates your return for a larger refund (and a larger payday) and doesn’t sign the return, you—the taxpayer—are responsible for your tax return and could be audited.

What Makes a CPA Different—and Why It Matters

Certified Public Accountants (CPAs) are licensed professionals with extensive training in tax laws and financial strategy. They can handle complex tax situations and provide expert advice on tax planning, deductions, and credits.

Unlike other preparers, CPAs can represent you before the IRS in any situation, offering peace of mind through their deep understanding of tax laws and ethical commitment.

CPAs also assist with estate, investment, and retirement planning, ensuring your financial decisions are tax-efficient and aligned with your long-term goals.

Resources for Choosing a Tax Professional

Check out the IRS Choosing a Tax Professional page on IRS.gov with information about tax return preparer credentials and qualifications.

Also, check the professional organization memberships for your tax preparer. For example, Smith Patrick CPAs is a member of American Institute of Certified Public Accountants (AICPA), the largest member association representing the accounting profession. Smith Patrick CPAs is also a member of the Missouri Society of CPAs, the premier professional development organization dedicated to CPAs in Missouri.