IRS Tax Tip 2022-144: Choosing a Tax Preparer

Did you know that McCauley Law Offices can help you with tax prep? Contact us today for a FREE consultation! If your taxes are prepared right the first time, you won’t have to worry about the IRS. Come to McCauley Law Offices and let us help you.

The IRS believes that taxpayers should know what they’re getting when they choose a tax preparer, and that’s why IRS Tax Tip 2022-144 is all about what a tax payer should look for when it comes time to choose a preparer.

Unless you’ve been living under a rock, you probably know that it’s filing extension crunch time. Tax payers should be cautious when choosing a preparer, and not jump to a hasty decision just to get their taxes filed quickly. All it takes for someone to be a paid tax return preparer is a IRS PTIN, or Preparer Tax Identification Number, where a tax pro has different higher levels of education and expertise. Each tax payer should carefully determine which type of preparer would be best suited to represent them. While MOST tax preparers provide an outstanding and professional tax service, there are instances where the taxpayer is burned by unreliable, or worse, unethical preparers who take advantage of them. Unfortunately, even in instances where the preparer is unreliable the taxpayer is responsible for the information included in their return. In other words, the taxpayer is left holding the bag for the missteps of their preparer.

The IRS suggests the following steps for tax payers to take in order to ensure they choose a preparer who will meet their needs:

  • Check the IRS Directory of Federal Tax Return Preparers. This searchable and sortable public directory helps taxpayers find a tax return preparer with specific qualifications.
  • Check the preparer’s history with the Better Business Bureau. Taxpayers should check for any disciplinary actions for credentialed tax return preparers. For CPAs, taxpayers should check with the State Board of Accountancy. For attorneys, they should check with the State Bar Association. For enrolled agents, they can verify the agent’s status on IRS.gov.
  • Ask about fees. Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own financial accounts. They should be wary of tax return preparers who claim they can get larger refunds than their competitors.
  • Ask if the preparer plans to use IRS Free File. Taxpayers should make sure their preparer offers to electronically file their tax return using IRS Free File.
  • Make sure the preparer is available. Some tax preparers only work on a seasonal basis. Taxpayers should consider whether the tax return preparer will be around after the filing deadline has passed. Taxpayers should do this because they might need the preparer to answer questions about the preparation of the tax return.
  • Ensure the preparer signs and includes their preparer tax identification number. Paid tax return preparers must have a PTIN to prepare tax returns. Preparers must also sign returns and include their PTIN.
  • Understand the preparer’s credentials. Enrolled agents, CPAs, and attorneys have unlimited practice rights and can represent taxpayers on any tax matter before the IRS. However, tax return preparers who participate in the IRS Annual Filing Season Program have limited practice rights.  They must have prepared and signed the tax return and can only represent the taxpayer for Taxpayer Advocate Service and customer service activities, only before any examination of the tax return.
Posted in Posts.