BBB Watch: Use caution when choosing tax preparers
Every year the Better Business Bureau receives inquiries and complaints about tax preparers. In the past 12 months both measures are up significantly as many consumers get assistance from professional tax preparers or tax software when filing taxes. The BBB encourages taxpayers to use caution when selecting tax preparation help.
In the past 12-month period the BBB has seen an increase of 76 percent in the number of complaints about Tax Return Preparation; 125 compared to 71. Also in the same period, the number of inquiries for Tax Return Preparation that the BBB receives increased 56 percent, a rise to 11,135 from 7,128.
"Tax season comes every year and it is important to leave time to do research on different tax preparers," said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and Northern Illinois. "Do not let false claims lead you astray, instead rely on tax preparer's credentials and your research."
The Better Business Bureau offers the following advice to find a trustworthy tax preparer:
Ask around. Get referrals from friends and family on who they use and check the BBB Reliability Report on tax preparation services.
Check on the preparer's history. Check to see if the preparer has a questionable history with the Better Business Bureau and check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for attorneys; and the IRS Office of Enrollment for enrolled agents.
Look for credentials. Ideally, your tax preparer should either be a certified public accountant, a tax attorney or an enrolled agent. All three can represent you before the IRS in all matters, including an audit. Also, find out if the preparer is affiliated with a professional organization that holds its members to a code of ethics.
Don't fall for the promise of a big refund. Be wary of any tax preparation service that promises larger refunds than the competition, and avoid any tax preparers who base their fee on a percentage of the refund.
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 wary of people claiming to be IRS agents. Don't reveal any personal information if someone calls and claims to be from the IRS. Instead, call the IRS at 1-800-829-1040 to see if an agent has a legitimate need to contact you.
Read the contract and know what you're paying for. Understand how much the service costs, 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 and how much that will cost.
It is illegal for tax preparers to encourage you to falsify deductions, exemptions or income in order to pay less tax or obtain tax credits. If they ask you to sign a blank or incomplete form or guarantee that you won't be audited, go elsewhere.
For more advice on finding professionals you can trust, visit www.bbb.org.