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If you plan to hire someone to manage your taxes this year—and there are certain scenarios where this is advisable—it’s vital to ensure they are trustworthy and not attempting to deceive you. Sadly, some individuals posing as tax experts lack proper qualifications or have malicious intentions, potentially using your information for identity theft or fraudulent schemes. Since you remain legally accountable for your tax filings, it’s crucial to thoroughly evaluate any tax preparer before sharing your sensitive details.
Verify Their PTIN
Legally, anyone paid to assist with federal tax returns must possess a valid Preparer Tax Identification Number (PTIN) issued by the IRS. This is a basic prerequisite for any professional you engage. However, not all tax preparers possess the same level of education or expertise: While certified public accountants (CPAs), attorneys, and enrolled agents are authorized to handle federal returns, there are also qualified preparers without these credentials who operate within a narrower scope.
Reputable tax professionals will always sign and include their PTIN on every return they handle. Beware of "ghost" preparers who avoid signing returns, as this is a major warning sign of potential fraud.
Assess Their Availability
While some qualified tax professionals operate seasonally or offer limited services—such as being unable to represent you during an audit—it’s wise to prioritize someone who remains accessible year-round to address any questions about your return after tax season ends.
Verify Their Credentials
As previously noted, tax preparers aren’t required to be CPAs, but it’s essential to research their qualifications and review client feedback on platforms like the Better Business Bureau, Google, and Yelp to confirm their legitimacy.
Additionally, you can verify their affiliation with professional organizations and investigate any disciplinary actions through the State Board of Accountancy (for CPAs), the State Bar Association (for attorneys), or the IRS' enrolled agent database.
Another option is to collaborate with an authorized IRS e-file provider.
Review Their Fee Structure
The IRS cautions against hiring tax professionals who base their fees on a percentage of your refund or those who guarantee larger refunds than others. Additionally, steer clear of anyone who insists on depositing refunds into their own account before transferring them to you. Always double-check the bank account and routing numbers on your return before filing.
Examine Their Preparation Methods
A trustworthy tax preparer will meticulously request documentation and receipts to substantiate your tax return. If they fail to gather details about your income, deductions, and tax credits, consider it a red flag. E-filed returns require a W-2, not a paystub, so avoid proceeding if your preparer insists on using the latter.
Lastly, ensure you carefully review your return before signing, and never submit a form that is incomplete or contains blank sections. Remember, you remain legally accountable for the accuracy of your return, even if a professional assists in its preparation.
