You’ve taken the DIY approach to filing your taxes, and you’d rather not do it again if you can help it. You’ve heard about professional tax preparers, but aren’t sure how to spot the bad ones. Since no two tax preparers are alike, here are some red flags to watch for:
1. They don’t ask you for any supporting documentation on tax filing day. Your tax preparer should ask you for your W2 and 1099 income forms, receipts for your itemized deductions (if applicable) and any other paperwork that can back up the figures that will be on your tax returns. If your tax preparer tells you they don’t need that information, get up and get out.
2. They file your return without your W2. While it’s true that the your final pay stub will have all the correct income information, along with state and federal taxes withheld, the IRS won’t accept your return unless you provide a W2 (filing by snail mail) or if your employer hasn’t yet filed their W2 information with the IRS.
Any tax preparer who tells you they can file your return without that information isn’t telling the truth.
3. They don’t have a Preparer Tax Identification Number (PTIN). Every qualified tax preparer that is a registered professional with the IRS has a PTIN. As to see your preparer’s PTIN; if they don’t have one, you’re not dealing with a legitimate tax professional.
4. They encourage you to exaggerate or to embellish figures to increase your tax refund. This is not only unethical, it’s illegal. It may be tempting to take a larger deduction or to claim more expenses in order to increase your refund or to decrease your tax liability, but being charged with tax fraud just isn’t worth it. Walk away from a preparer that encourages you to do either. It’s not worth it.
A legitimate tax preparer will ask you for supporting documentation, will only file your return once your W2 is issued, and will only file a return based on verifiable numbers. They’ll also be registered with the IRS and will have a PTIN. Avoid any tax preparer that doesn’t meet these guidelines.
Tax day is stressful enough. Don’t add to the stress by allowing a sketchy tax preparer to file your returns. The additional stress, legal implications and financial hardship just aren’t worth it in the long run.