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Educational Consumer Tips

Tax Preparation

Author: Better Business Bureau
Published:
Category: Finance

Each year, BBB receives thousands of complaints against tax preparers alleging errors in tax returns or unauthorized fees taken out of refunds. Better Business Bureau urges consumers to choose tax preparers with caution to avoid unwanted fees, and even worse, unwanted audits.

Verify competency. It is recommended consumers seek a California Tax Education Council registered tax preparer, certified public accountant, tax attorney or enrolled agent. Verify their status by contacting the regulating agency. California requires non-exempt tax preparers be registered with CTEC and carry a $5,000 bond. Verify the preparer here: http://www.ctec.org/Payer/FindVerifyPreparer/

Research.
Search for the company at necal.bbb.org and read through their complaint history. Search for the company or individual in a search engine and review the results.

Get an estimate. Before you allow any work done on your behalf, present all that you need done to your tax preparer and request a written estimate. Watch out for big refunds. Be wary of preparers who promise to beat competitor's refunds or base their fee on a percentage of your refund. Focus, instead, on reporting your information accurately.

Beware of refund anticipation loans. These are not actual refunds from the IRS and in some cases, are treated as loans that carry high interest rates.

Keep all documents. Retain any receipts or documents used to prepare the tax return. The burden of proof falls on the consumer when an audit occurs. Get copies of any signed documents. And remember, read what you sign. Inaccurate information reported on your documents, whether you or someone else enters it, is your responsibility.