When your employer hands you your W-2 form, it can be tempting to rush out and get your taxes done so you can get your refund sooner. But, Better Business Bureau Serving Eastern Oklahoma encourages taxpayers to take the time and use caution when selecting a tax preparer to avoid mistakes that could result in additional fees.
Most of us enlist the help of a tax preparer or tax software to file taxes. Unfortunately, every year BBB receives thousands of complaints from consumers against tax preparers. In fact, BBB has seen a rise in complaints over the last three years.
In 2013, BBB received nearly 4,000 complaints against tax return preparation businesses across the United States. Common complaints state that the tax preparer made errors in their return which resulted in fines and fees. Other complaints allege customer service, billing and contract issues.
There is also the risk of tax identity theft. This occurs when someone uses your Social Security number and personal information to file a tax refund in your name. According to the Federal Trade Commission’s 2012 Consumer Sentinel Network Data Book, statistics show tax identity theft accounted for over 40 percent of identity theft complaints.
BBB and the IRS offer the following advice when searching for a tax preparer:
- Ask around. Get referrals from friends and family on who they use. Check the BBB Business Review of the tax preparation service you plan to use at bbb.org for detailed complaint information. Use www.tulsa.bbb.org for a list of BBB Accredited Businesses.
- Look for credentials. Ideally, your tax preparer should either be a certified public accountant, a tax attorney or an enrolled agent. All three can represent you before the IRS in all matters, including an audit.
- Don’t fall for the promise of a big refund. Be wary of any tax preparation service promising larger refunds than the competition. Avoid any tax preparer who bases their fee on a percentage of the refund.
- Think about accessibility. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors, or in case of an audit, make sure you are able to contact you tax preparer at anytime of the year.
- Read the contract carefully. Read tax preparation service contracts closely to ensure you understand issues such as how much it is going to cost for the service, how the cost will be affected if preparation is more complicated and time consuming than expected and whether the tax preparer will represent you in the case of an audit.
- Ask about service fees. Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can. Always make sure any refund due is sent to you or deposited into your bank account. Taxpayers should not deposit their refund into a preparer’s bank account.
- Provide records and receipts. Good preparers will ask to see your records and receipts. They’ll ask you questions to determine your total income, deductions, tax credits and other items. Do not use a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
- Never sign a blank return. Don’t use a tax preparer that asks you to sign a blank tax form.
- Review your return before signing. Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it.
- Ensure the preparer signs and includes their PTIN. Paid preparers must sign returns and include their PTIN as required bylaw. The preparer must also give you a copy of the return.
- Report abusive tax preparers to the IRS. You can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157,Complaint: Tax Return Preparer. If you suspect a return preparer filed orchanged the return without your consent, you should also file Form 14157-A,Return Preparer Fraud or Misconduct Affidavit. You can get these forms at IRS.gov or by calling 800-TAX-FORM (800-829-3676).