The October 16, 2023, extension filing deadline is coming up, and many taxpayers who requested an extension are now choosing a tax return preparer. Most tax return preparers provide honest, quality service, but there are some bad apples out there – from unethical preparers to outright scammers. When hiring an individual or firm to prepare a tax return, taxpayers need to understand how to choose a tax preparer wisely and what questions to ask.
Things to consider when choosing a tax return preparer
- Ensure the preparer signs and includes their PTIN. By law, anyone who is paid to prepare or help prepare federal tax returns must have a valid Preparer Tax Identification Number. Paid preparers must sign and include their PTIN on any tax return they prepare. Not signing a return is a red flag that the paid preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. Taxpayers should avoid these unethical tax return preparers.
- Make sure the preparer is available year-round. If questions come up about a tax return, taxpayers may need to contact the preparer after the filing season is over.
- Review the preparer’s history. Taxpayers can check with the Better Business Bureau for information about the preparer, any disciplinary actions, and the license status for credentialed preparers. Other resources include: the State Board of Accountancy’s website for CPAs; the State Bar Association for attorneys; and the IRS Directory of Federal Tax Return Preparers for enrolled agents, or verify an enrolled agent’s status online.
- Ask about service fees. Taxpayers should 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. Be wary of tax return preparers who claim they can get larger refunds than their competitors.
- Ensure their preparer offers IRS e-file. The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit.
- Understand the preparer’s credentials and qualifications. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification. Tax return preparers who participate in the Annual Filing Season Program may represent taxpayers in limited situations if they prepared and signed the tax return.
Once a taxpayer has selected a tax preparer, they should stay vigilant
- Good preparers ask to see records and receipts. They’ll also ask questions to determine the client’s total income, deductions, tax credits and other items. Taxpayers should avoid a tax return preparer who e-files using pay stubs instead of W-2s. This is against IRS rules.
- Taxpayers should review the tax return before signing it and ask questions if something is unclear or inaccurate.
- Any refund should go directly to the taxpayer – not into the preparer’s bank account. Taxpayers should check the routing and bank account number on the completed return and make sure they’re accurate.
- Taxpayers are responsible for filing a complete and correct tax return. They should never sign a blank or incomplete return and never hire a tax return preparer who asks them to do so.
Tax Tip 2023-109
Contact: John Michaels
(202) 822-0728
For Immediate Release
Alabaster Tax Practitioners Attends National Tax Practice Institute™
Washington, D.C. – 8/3/17 — In order to stay up-to-date on the latest changes in tax regulations, Cris Nelson, EA, and Kenyatta Ector, EA. attended the three-day National Tax Practice Institute® in Las Vegas, July 31 – August 3, 2017, further developing and fortifying their skills representing taxpayers before the IRS.
The course, open only to licensed tax professionals, was developed to prepare licensed representatives to protect their clients’ rights by disseminating the most recent information about IRS laws and procedures critical to representation.
At its core, NTPI is a three-level program developed to hone the skills of enrolled practitioners at all stages of their careers. With each level of this program, students expand their knowledge and skills, and gain the additional expertise needed to successfully guide their clients through the often challenging maze of IRS codes, internal regulations, and agency structure.
Enrolled agents (EAs) are a diverse group of independent, federally-authorized tax practitioners who have demonstrated a high level of technical competence in tax law and are licensed to practice by the United States government. EAs advise and represent taxpayers before the IRS, including taxpayers who are being examined, are unable to pay or are trying to avoid or recover penalties. EAs also prepare tax returns for individuals, partnerships, corporations, estates, trusts and any other entities with tax-reporting requirements. Unlike tax attorneys and CPAs, who may or may not choose to specialize in taxation, all EAs specialize in taxation and are required by the federal government to maintain their professional skills with continuing professional education. They are the only federally-authorized tax practitioners with unlimited rights of representation before IRS. That’s why they’re known as “America’s Tax Experts!”
Cris Nelson. EA and Kenyatta Ector, EA are members of the National Association of Enrolled Agents (NAEA) and the Alabama Society of Enrolled Agents.
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About the National Association of Enrolled Agents
The National Association of Enrolled Agents (NAEA) has been powering enrolled agents, America’s tax experts®, for more than 45 years. NAEA is a non-profit membership organization composed of tax specialists licensed by the U.S. Treasury Department. NAEA provides the networking, educational opportunities, programs and services that enable enrolled agents and other tax professionals to excel beyond their peers. Enrolled agents are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service. To find out more, visit www.naea.org and follow NAEA on Facebook and Twitter.