IRS Tax Tip 2023-109, Sept. 6, 2023

The Oct. 16, 2023, extension submitting deadline is developing, and plenty of taxpayers who requested an extension at the moment are selecting a tax return preparer. Most tax return preparers present trustworthy, high quality service, however there are some unhealthy apples on the market – from unethical preparers to outright scammers. When hiring a person or agency to organize a tax return, taxpayers want to know how to decide on a tax preparer correctly and what inquiries to ask.

Issues to think about when selecting a tax return preparer

• Make sure the preparer indicators and consists of their PTIN. By legislation, anybody who’s paid to organize or assist put together federal tax returns should have a sound Preparer Tax Identification Quantity. Paid preparers should signal and embrace their PTIN on any tax return they put together. Not signing a return is a purple flag that the paid preparer could also be trying to make a fast revenue by promising an enormous refund or charging charges primarily based on the dimensions of the refund. Taxpayers ought to keep away from these unethical tax return preparers.
• Be sure that the preparer is accessible year-round. If questions come up a couple of tax return, taxpayers could must contact the preparer after the submitting season is over.
• Overview the preparer’s historical past. Taxpayers can examine with the Higher Business Bureau for details about the preparer, any disciplinary actions, and the license standing for credentialed preparers. Different assets embrace: the State Board of Accountancy’s website for CPAs; the State Bar Affiliation for attorneys; and the IRS Listing of Federal Tax Return Preparers for enrolled brokers, or confirm an enrolled agent’s standing on-line.
• Ask about service charges. Taxpayers ought to keep away from tax return preparers who base their charges on a share of the refund or who provide to deposit all or a part of the refund into their very own financial accounts. Be cautious of tax return preparers who declare they’ll get bigger refunds than their opponents.
• Guarantee their preparer affords IRS e-file. The IRS points most refunds in fewer than 21 days for taxpayers who file electronically and select direct deposit.
• Perceive the preparer’s credentials and {qualifications}. Attorneys, CPAs and enrolled brokers can symbolize any consumer earlier than the IRS in any scenario. The IRS Listing of Federal Tax Return Preparers with Credentials and Choose {Qualifications} may help establish many preparers by kind of credential or qualification. Tax return preparers who take part within the Annual Submitting Season Program could symbolize taxpayers in restricted conditions in the event that they ready and signed the tax return.

As soon as a taxpayer has chosen a tax preparer, they need to keep vigilant

• Good preparers ask to see information and receipts. They’re going to additionally ask questions to find out the consumer’s whole revenue, deductions, tax credit and different objects. Taxpayers ought to keep away from a tax return preparer who e-files utilizing pay stubs as an alternative of W-2s. That is in opposition to IRS guidelines.
• Taxpayers ought to assessment the tax return earlier than signing it and ask questions if one thing is unclear or inaccurate.
• Any refund ought to go on to the taxpayer – not into the preparer’s checking account. Taxpayers ought to examine the routing and checking account quantity on the finished return and ensure they’re correct.
• Taxpayers are chargeable for submitting a whole and proper tax return. They need to by no means signal a clean or incomplete return and by no means rent a tax return preparer who asks them to take action.

Taxpayers can report preparer misconduct to the IRS utilizing Kind 14157, Criticism: Tax Return PreparerPDF. If a taxpayer suspects a tax return preparer filed or modified their tax return with out their consent, they need to file Kind 14157-A, Tax Return Preparer Fraud or Misconduct AffidavitPDF.