With the tax season in full bloom and a host of new and seemingly confusing tax reforms like the Tax Cuts and Jobs Act in effect, it is no surprise that a lot of people, even those who generally did it themselves, are hiring professional CPAs to help them prepare their tax returns.
However, this changing trend comes with its own set of potential problems like perpetrating refund fraud, identity theft, and the likes of which ultimately hurt innocent taxpayers.
The IRS tilts its head in recognition of the role that an honest tax professional plays by helping citizens pay taxes in a timely fashion and contributing to the overall US economy. However, the IRS also has warned people to be very careful about who they choose as their tax representatives. The hired CPAs, after all, are made privy to a host of detailed and privileged financial information of their respective clients. Hence, it’s essential that they are credible and trustworthy.
The IRS works actively to protect innocent taxpayers against fraudulent organizations and people who exploit such opportunities for their own benefits. There are a host of civil penalties that the IRS enforces on fraudulent tax preparers. It has also been working in collaboration with the Justice Department to bring such criminals to task.
We have created a list of simple steps that can be effectively used to judge the authenticity of a tax professional or even an organization providing tax services. These can be used to ensure that your financials are in the right hand:
- Look for professionals who are available all year around. Whether independent CPAs or even organizations offering tax services, if they provide assistance all year around, there’s a good chance they are authentic professionals.
- In case of an individual tax professional, ask for their IRS Preparer Tax Identification Number (PTIN). Paid tax preparers are required to register themselves with the IRS, and they are issued a PTIN number.
- Further, it is essential to inquire about his/her professional certification (- whether an enrolled agent, a Certified Professional Agent), if he/she belongs to a professional organization, or ascertain if they are abreast with the latest updates in the tax sector.
- Verify the tax preparer’s credentials with the IRS’ Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help you locate a professional with proper qualifications. This list contains the names, city names, state and even zip codes of all enlisted CPAs, attorneys, and enrolled agents.
- Go through the preparer’s history with the Better Business Bureau. Check the license status and scan for any previous disciplinary actions against the preparer.
- Confirm their service fees. It’s a big red flag if they charge in terms of percentage of your refund. Unrealistic promises and unnecessary boasting should also make you think twice. Do not share your financial details with them in the process of simply inquiring about their service fees.
- Tax preparers who file for more than 10 people are required to file electronically by the IRS. Thus, make sure that your tax preparer files your return online and confirm the status of your return e-file.
- Creditable tax preparers ask for their client’s records and receipts. Make sure they are keen on discussing all your documentation before filing. Also, NEVER trust a tax preparer who uses anything but a W-2 form for filing. The IRS prohibits it.
- Never sign a blank or incomplete return.
We hope this article helps you with your CPA hiring decisions. For expert and verified professional tax services, drop in a mail at firstname.lastname@example.org or call us at (888)-482-0279 for an on-call consultation.