The Better Business Bureau of Minnesota and North Dakota (BBB) encourages taxpayers to do their research before selecting tax preparation help or they may get hit with fines and fees if the return isn’t correct or filed late. The BBB also cautions against tax preparers who claim they can obtain larger refunds than other tax preparers. According to the IRS, if your returns are prepared correctly, every preparer should derive substantially similar numbers.
In 2009, the BBB received just over 3,000 complaints against tax preparers. Commonly, complainants stated that the tax preparer made errors in their return which resulted in fines and fees. The IRS reports that roughly 80 percent of Americans enlist the help of a tax preparer or tax software when filing their taxes.
“Many people depend upon their tax refunds to cover bills and basic living expenses,” said Dana Badgerow, president and CEO of the Better Business Bureau. “Therefore, if you choose to have someone else do your taxes, it’s important you know their background, as well as their qualifications.” The BBB reminds taxpayers they are legally responsible for what’s on their own tax returns, even if they’re prepared by someone else, and offers the following advice on how to find a trustworthy tax preparer, as well as some things to keep in mind:
- Ask around. Get referrals from friends and family on who they use and check BBB reports on tax preparers and tax preparation services at www.bbb.org.
- Look for credentials. Ideally, your tax preparer should either be a certified public accountant, a tax attorney, an enrolled agent or a certified E-file provider. Be sure to find out if the preparer is affiliated with a professional organization that provides or requires its members to pursue continuing education and holds them accountable to a code of ethics.
- Investigate whether the preparer has any questionable history with your state’s Board of Accountancy (for CPA’s), the State Bar Association (for attorneys) or the IRS Office of Professional Responsibility (OPR) for enrolled agents.
- Don’t fall for the promise of big refunds. Be wary of any tax preparation service that promises larger refunds than the competition, and avoid tax preparers who base their fee on a percentage of the refund.
- Remember that a Paid Preparer is required by law to sign your return and fill in the preparer areas of the form. They should also include their appropriate identifying number on the return. In addition, the preparer must give you a copy of your return.
- Think about accessibility. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors, or in case of an audit, you might need to be able to contact your tax preparer throughout the year; be sure to find out how you would do so.
- Read the contract carefully. Read tax preparation service contracts closely to ensure you understand issues such as how much it is going to cost for the service, how the cost will be affected if preparation is more complicated and time consuming than expected and whether the tax preparer will represent you in case of an audit.
For more advice on finding professionals you can trust, visit www.bbb.org.
The mission of the Better Business Bureau is to promote, through self-regulation, the highest standards of business ethics and conduct; and to instill public confidence in responsible businesses through programs of education and action that inform, protect and assist the general public. Our hours of operation are 8 a.m. to 5 p.m. Monday through Friday. Contact the BBB at www.bbb.org or 651-699-1111, toll-free at 1-800-646-6222.