It is important that you choose a tax preparer with care and caution. As the taxpayer you are legally responsible for what you file with the IRS regardless of whether you use a paid return preparer.
Most return preparers are professional and honest, but some engage in illegal activities. For example, preparers may manipulate income amounts to fraudulently obtain tax credits. In some situations you may not even know about the false expenses, deductions, exemptions and/or credits shown on your tax return.
However, when the IRS detects a fraudulent return, the taxpayer — not the return preparer — must pay the additional taxes and interest and may be subject to penalties.
- Be cautious of tax preparers who claim they can obtain larger refunds than other preparers or who base their fee on a percentage of the refund.
- Check the preparer’s credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents (EAs) can represent taxpayers before the IRS in all matters, including audits, collection and appeals.
- Inquire whether the preparer is affiliated with a professional organization that provides its members with continuing education.
- Consider whether the individual or firm will be around to answer questions about the tax return months, or even years, after the return has been filed.
Reputable preparers will ask to see substantiation such as receipts and will ask multiple questions to determine whether expenses, deductions and other items qualify. By doing so, they are trying to help their clients file complete and accurate tax returns.