J. William Seabrooke CPA P.C.

The selection of a tax preparer is probably one of the most important decisions that any tax payer will make.  I recently read an article that stated that over 80% of Americans will obtain some level of  tax return preparation assistance.  As I review the plethora of tax law changes that have emerged in 2008-2009  from both the U.S. Congress and President Obama’s administration it is obvious to me that the comprehension and interpretation of all of these changes is a monumental, formidable task not just for tax payers, but also for tax preparers.  Remaining abreast of all of these changes/updates has become a full-time task for me.  In a nutshell, unless you have a very simple, uncomplicated tax return, I  recommend that you do not prepare your own tax return without some level of assistance from a professional tax preparer.

Your tax preparer is also just as important as the person whom you select for your legal affairs (attorney) and your investments (financial advisor).  I continue to believe  that the choice is equally as important as choosing  your family physician.  Additionally, the Internal Revenue Service is now implementing new, higher standards for  anyone who prepares a tax return for someone else.  These policies  will mandate that any tax preparer must first attain, and then continue to maintain, his or her compliance with many stringent professional standards.

The IRS has just recently provided eight tips that are beneficial in the decision-making process.  I would like to add a very important  ninth tip – do not allow any one to prepare your tax return unless they provide you with a formal, written “engagement letter” that has been signed by everyone.  This document will include many very important aspects of your relationship (the “engagement”), especially all of the separate, specific reponsibilities for you and the tax preparer.  Even though you have someone else prepare your tax return, you remain fully liable for the accruracy, completeness, and timely filing  of your tax return.   Here are the the IRS recommendations:

Eight Tips to Help You Choose a Tax Preparer

The IRS urges people to use care and caution when choosing a tax preparer.  Remember, you are legally responsible for what’s on your tax return even if it was prepared by an another individual or firm.

Most tax return preparers are professional, honest and provide excellent service to their clients. However, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients.  Therefore, it’s important to find a qualified tax professional.

The following tips will help you choose a preparer who will offer the best service for your tax preparation needs.

1. Check the person’s qualifications Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
2. Check on the preparer’s history Check to see if the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association for attorneys.
3. Find out about their service fees Avoid preparers that base their fee on a percentage of the amount of your refund or those who claim they can obtain larger refunds than other preparers.
4. Make sure the tax preparer is accessible  Make sure you will be able to contact the tax preparer after the return has been filed, even after April 15, in case questions arise.
5. Provide all records and receipts needed to prepare your return Most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.
6. Never sign a blank return Avoid tax preparers that ask you to sign a blank tax form.
7. Review the entire return before signing it  Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
8. Make sure the preparer signs the form  A paid preparer must sign the return as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return.  The preparer must also give you a copy of the return.

You can report abusive tax preparers and suspected tax fraud to the IRS on Form 3949-A, Information Referral or by sending a letter to Internal Revenue Service, Fresno, CA 93888.  Download Form 3949-A from IRS.gov or order by mail at 800-829-3676.      

 

Links:

• Form 3949-A Information Referral (PDF 94K)
• Where Do You Report Suspected Fraud Activity?