How to Choose a Tax Preparer

Althought the April 15th deadline is still a little more than two months away…W-2s and 1099s are just beginning to arrive in mailboxes. This poses the question: now that I have my W-2 or 1099, how to choose a tax preparer? It is important to ask questions and do a little research before making the decision:

ASK:

Is the preparer readily accessible before and after the return is filed?

As the April 15th deadline approaches, preparers become harder and harder to reach. After delivering all of the information to the preparer it can be a little difficult to reach the preparer. Make sure that the preparer will be accessible during the preparation period. Also, after the return is filed, it is important that the preparer can be reached in case there are questions or a problem arises.

Is the preparer affiliated with any organizations?

Check to see if the preparer is registered with or affiliated with any professional organization. Depending on the organization the preparer is affiliated with, the preparer might have to comply with the organization’s ethical rules and standards for continuing education.

How is the preparer’s fee structured?

Ask the preparer if they charge a flat fee for the return. Depending on the complexity of the return, it is important to find out if the preparer charges a flat fee or bases it on a percentage of the refund obtained. If it is the latter, be wary. It is best to avoid preparers who base their fee on a percentage of the return or who promise that they can get you a larger refund than another preparer. Most reputable preparers will charge a flat fee based on the complexity of the return and not based on the amount of the refund that you will receive.
RESEARCH:

What is the preparer’s history?

It is always worth taking a few minutes to do a little background check on your perspective preparer. Check the Better Business Bureau for accountants, State Bar Associations for attorneys and IRS Office of Professional Responsibility for enrolled agents. It is important to inquire (from the agencies listed) as to whether or not there have been any disciplinary actions or complaints filed against the preparer. Also, make sure that the preparer’s license is current and the preparer is not or has not been suspended at any point.

What are the new IRS regulations governing tax preparers?

All paid tax preparers are required to have a Preparer Identification Number. Anyone paid to prepare a return must apply for a PTIN number (even if they currently have one) before preparing a 2011 federal return. Furthermore, this number must be included on the signature page of the return (see below).
HELPFUL TIPS:

Always review the tax return in its entirety before signing. Never sign a simple blank return and then return it to the preparer to “fill in the blank” as it is very important that you sign the actual copy that will be filed. Always make sure that you receive a copy of the actual return that is filed and always make sure that the preparer both signs the return as well as includes his or her PTIN (as required by law, see above). Ultimately, YOU are responsible for the accuracy of the return even though you did not personally prepare the return so it is very important that you review everything that is included on the return for accuracy.

 

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

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