Choosing the right tax preparer

There are many reasons to choose to use a tax return preparer to assist you in filing your return.  You may be in a position with a number of complicated issues, you may feel you get better results by using someone proficient in taxes or you may just don't want to deal with it.  The fact is this is a crucial choice.  You are legally responsible for the information on your tax return, so it's in your best interest to file your return correctly.  The question of who should you use is an individual choice that depends on your personal situation.  Some people are happy using one of the franchise chains, where other people benefit more from using an individual or small firm.  In this article we'll cover some tips from making the right choice.

The IRS has implemented a new oversight program for tax preparers.  Starting this year a taxpayer should use a preparer that signs the return and includes their PTIN (Preparer Tax ID Number).  Here are some tips to assist in choosing a preparer:

• Check the preparers credentials  The implementation of the PTIN requirement brings new requirements to the industry.  It is a good idea once you have verified that the preparer will be using a PTIN to ask if they belong to any professional organizations and if they are attending any continuing education classes.  The new regulations also include a competency test and continuing education requirements.  CPA's, Enrolled Agents and attorneys are exempt from the testing requirement due to the fact they have already satisfied the requirements of their professional designation.
• Check out the preparers history  It is a good idea to verify with the Better Business Bureau to verify if there have been previous complaints.  You should also check out any licensure violations with the state board of accountancy (for CPA's) or the IRS Office on Enrollment (for Enrolled Agents), if the preparer uses either of these designations.
• Ask the preparer about their service fees  If a preparer based their fee on a percentage of the amount of your tax return this is usually a red flag.  A refund that is direct deposited should only be deposited in an account bearing your name and should never be deposited in the account of a preparer.
• Signing the return  A reputable preparer will never ask you to sign the return prior to preparation.  You should also review the return before signing it.  It is also a good idea to make sure they sign the return when it is complete.
• Follow up  Make sure you can contact the preparer after the return is completed, even after the filing deadline, in the event you have questions or receive a notice.
• Get copies  Preparers are obligated to provide the taxpayer with copies of the return.  They must also maintain copies for their records.  The taxpayer copy can be either paper or electronic, an increasing number of preparers are going paperless.
• Report abusive tax preparers  The IRS has created Form 14157 to allow taxpayers to report abusive and potentially fraudulent activities.

The choice you make related to if you self-prepare or use a tax preparer is ultimately a personal one.  There is not a right or wrong answer, but it is important that it is the right choice for your situation.  The most important thing is that your return is submitted correctly to avoid any possible penalties in the future.  I hope these tips help you make an educated choice.