BGBC Partners, LLP Tax Update: Tips for Choosing the Right Tax Return Preparer
Many of you just finalized your 2016 return and think you are done for another year. Whether you are tired of struggling through your return yourself, or you would like to discuss your situation with a professional, now is a great time to select a tax preparer.
Selecting someone now will give you time to meet with them and determine a financial strategy for the year so you do not end up with a surprise tax bill due next year. The more time they have to learn about you, and your business, the more personalized your advice will be.
Should you use a Certified Public Accountant (“CPA”), or an Enrolled Agent (“EA”)? Should you go to a big firm, a mom & pop operation, or one of the national companies that advertises that “quick, no-hassle” refund? It is very important to choose wisely because the taxpayer is always ultimately responsible for everything reported on his or her tax return. It does not matter whether you do it yourself, or you pay someone to prepare it for you – the IRS will hold you responsible for any errors or omissions.
To assist you with choosing the right person to prepare your tax return, we’ve assembled a list of tips to keep in mind during your selection process:- Consider their qualifications. All paid tax return preparers are required to have a Preparer Tax Identification Number (“PTIN”). Do not use a preparer that doesn’t have a PTIN, or can’t show you one. The preparer must sign the return and record his or her PTIN as required by law.
- Consider their professional affiliations. Ask the preparer if he or she is a member of any professional organizations for tax experts, and ask if they attend continuing education. Don’t be afraid to ask for references. Check the Better Business Bureau, state boards of accountancy (for CPAs), state bar associations (for attorneys), and the IRS Office of Enrollment (for EAs) for any complaints against the preparer.
- Do not use a preparer that bases his or her fee on the amount of refund you are getting. These preparers have been known to underreport income and/or over report deductions just to inflate the refund amount (and thus, your fee).
- Check to make sure the preparer offers e-filing. E-filing reduces the occurrence of human error while at the same time decreasing the amount of time needed for processing your return. If you are expecting a refund, you’ll get it faster. All paid preparers who prepare and file more than 10 returns must e-file unless the client opts to file a paper return.
- Do not use a preparer that does not ask to see your tax records, or is willing to “make up” numbers.
- Never sign a blank tax form. Review the entire tax return before signing it.
- Understand every line of the form that has an amount filled in – ask questions if you do not. Verify that all the information reported is correct and accurate.
- Always get and keep a copy of the tax return for your records
Remember, even if you pay someone else to prepare the return (and even if the preparer signs the return and records his or her PTIN), you are ultimately responsible for everything on it. If a preparer makes a mistake that causes you to owe more tax, the IRS will seek to collect the additional tax from you, and only you.
