Choose tax preparer wisely, IRS says

Fee based on percentage of refund is red flag

SAN ANTONIO –  The IRS and the Better Business Bureau advise taxpayers to choose wisely when selecting a tax preparer, as they can sometimes seem as intimidating as filing your taxes yourself. 

"Bad tax preparers are a problem because, when you sign your return, you become responsible for everything on it," said Michael Devine, with the local IRS division.

All paid preparers must have what's called a prepared tax identification number, or PTIN. If a preparer does not have one, he or she is not legally qualified to do your taxes.

Devine suggests taxpayers simply ask trusted friends and neighbors for referrals. But after that, ask for credentials. Certified public accountants, enrolled agents and tax attorneys can represent you in case of an audit, but not all tax preparers can.

RESOURCE: Tips on avoiding tax-related identity theft

The internet can be useful for checking a preparer's history. Taxpayers can look for a history of complaints with the Better Business Bureau or check at various licensing offices — for example, the state bar for tax attorneys — to see if a preparer has been the subject of any disciplinary actions. 

Taxpayers can check on IRS.gov for the status of enrolled agents.

There are some red flags that consumers should beware of, such as preparers charging large fees or basing their fee on a percentage of the client's refund.

Keith Schmitz, president of the Texas Society of Enrolled Agents, said charging a percentage is unethical.

"It increases fraud because they are incentivized to increase your refund," he said.

The IRS suggests finding a tax preparer who is available all year, not just at tax time, and making sure the preparer goes over the return with you line by line.

"If the tax return is blank and they ask you to sign it, you should take all of your information and leave," Devine said. "You never sign a blank return. You never sign a return you don't understand."

Devine said not to allow your refund to be sent to the preparer instead of directly to you. Preparers are required to give you a copy of your return. Make sure you get one, Devine said, in case a discrepancy in numbers is discovered later.

RELATED: What to do with old tax documents

For many taxpayers who meet income eligibility requirements, there is free help available.

On www.IRS.gov, there is a program called Freefile. People who earn less than $66,000 a year can gain access to about a dozen tax preparers.

Volunteer Income Tax Assistance, or VITA, helps low- and middle-income residents prepare taxes at dozens of sites citywide.

Family Service Association is also helping to give people access to assistance through the MyFreeTaxes.org program. It's a way for people to learn to do their taxes themselves.


About the Author

Marilyn Moritz is an award-winning journalist dedicated to digging up information that can make people’s lives a little bit better. As KSAT’S 12 On Your Side Consumer reporter, she focuses on exposing scams and dangerous products and helping people save money.

Recommended Videos