Tips of Avoiding a Devious Tax Preparer

July 10, 2012 by  Filed under: Taxes 

There are many taxpayers who have found themselves on the wrong side of the IRS because they used the services of unscrupulous tax preparers. There are also others who have had their refunds embezzled by preparers. It is therefore, important that you research a tax preparer before signing up for his or her services. Below are some tips that will help you spot a crooked preparer:

  • Rate Depends on Amount of Refund – Avoid preparers who base their consultation fees based on the amount of a tax refund that they are able to get you. This is because such preparers use dubious ways of increasing your refund, such as inflate figures or including non-existing dependents. Such deceptive ways of increasing your tax refund can easily lead to both civil and criminal charges and therefore, it is important that you avoid such people.
  • Preparers Who Promise Large Refund – Another red flag for dubious preparers is ones who promise to get you a very large refund check as a way of enticing you to hire his or her services. Once again, such preparers may use illegal ways of raising your refund amount and this may easily get you into trouble with the tax authorities.
  • PTIN Qualifications – When searching for a preparer to hire his or her services, it is important that you ensure that the preparer has a Preparer Tax Identity Number (PTIN). As from a policy started in 2012, the IRS is requiring all preparers to apply for the PTIN after meeting certain meticulous qualifications. Once the IRS authenticates the credibility of the preparer, they issue the preparer with the PTIN. Therefore, confirming that your preparer has a PTIN is an important precaution to avoiding shady tax preparers. Besides having the PTIN, the preparer also ought to sign the tax return form before submitting.
  • Deposit Refunds to Preparer Account – Tax preparers who request you to indicate their address for the tax refunds or deposit tax refunds into their bank account are another red flag sign. A tax preparer should always indicate the taxpayers account for the tax refund.
  • Signing Blank Form – Tax preparers that prepare tax returns and submit without you going through the returns is yet another red flag. Some tax preparers will request you to sign a blank tax return form. They will then tell you that they will prepare and submit the return on your behalf and you do not need to confirm the details. Such an arrangement can lead to the preparer giving false information for selfish gain. Even when a taxpayer uses the services of a preparer, he or she is still held responsible for all the information provided on the return. Therefore, ensure that you verify the information indicated on the return before signing the tax return form.

Rob L Daniel and partners of Limon Whitaker & Morgan, for years have helped businesses and individuals Nationwide, with their delinquent IRS & State tax problems. The firm is based in Los Angeles, California USA. http://www.limonwhitaker.com / Tel:888.321.6188

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