How to check out a tax pro
It's your name on the bottom line, so make sure you find someone who is ethical and competent.
You've decided to hire someone to file your taxes this year. You've looked at your tax pro options and decided which kind of paid preparer fits your needs.
Now the next step: Thoroughly vetting the tax professional.
Remember, regardless of who fills out your 1040 and sends it on to the IRS, when you sign your tax return, you are legally responsible for everything on it. So it's crucial to hire a tax pro who's not only knowledgeable, but also ethical.
Most tax preparers are honest and provide quality service. But as with any consumer transaction, it's up to you, the buyer of the services, to make sure you're hiring a true professional.
Here are some things to keep in mind when someone else prepares your return.
Check on IRS registration
Starting this year, preparers must be registered with the IRS to file a return. Make sure the person you hire has done so.
Look into whether the preparer has any questionable history with the Better Business Bureau. Also check your state's board of accountancy for CPAs, your state's bar association for attorneys or the IRS Office of Professional Responsibility for Enrolled Agents.
If you live in a state that licenses or registers tax preparers, contact that regulatory office to make sure there are no complaints against the person you plan to hire.
Do they belong?
Check your preparers professional affiliations. Membership in such groups requires that a tax preparer follow a code of ethics and participate in continuing education programs.
Office hours are important
Make sure your tax preparer will be around after the April filing deadline. Some offices open up just during filing season and then disappear as soon as returns are filed. But the IRS can come asking questions about a return months later. The person who helped you file it should be around so you can get the answers to any possible IRS questions.
Who does the actual work?
If your tax preparer is part of larger firm, determine whether he or she will be the person actually doing your tax work or whether your taxes will be delegated to someone else in the office, perhaps a person with less tax training.
Also find out if your preparer exports tax returns for preparation. Foreign countries do not have the same security and privacy laws as the United States, nor is there any recourse should your information be compromised as a result of lax or nonexistent privacy procedures.
How do they charge?
Don't hire a tax preparer whose fee is based on how big of a refund you get. That's usually an indication that tax law envelopes will be pushed to get you more money than you're rightfully entitled to just so your tax preparer can make more money.
Similarly, avoid preparers who claim they can get you a larger refund than other preparers. If your returns are prepared correctly, every preparer should come up with essentially the same tax and refund numbers.
Find someone who wants to know
Be wary of preparers who aren't concerned about documentation. Reputable tax preparers will request to see your receipts and will ask you detailed questions to determine your qualifications for expenses, deductions, credits and the like. It's always better that these questions are asked by your preparer and answered before filing, rather than later by an IRS examiner.
Avoid blank return requests
Remember that warning about being responsible for the return you sign? If a tax preparer asks you to sign a blank tax return, find a new tax pro. Never sign a tax document before it's finished and then only after you've read it carefully and understand the entries.
If you're unsure about an entry and your tax pro can't explain it to your satisfaction, then don't sign the return. A tax preparer who won't or can't explain the items on your 1040 and associated schedules is either incompetent or unscrupulous.
Sure, thoroughly checking out your tax pro takes some time. But it's time well spent when it ensures that your taxes are completed properly.
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.