IRS Warning: Choose Your Tax Preparer Wisely to Avoid Scams & Mistakes

Why Picking the Right Tax Preparer Matters

Tax season can be stressful, and many people look for help when filing their taxes. The IRS reminds taxpayers to choose a tax preparer carefully. A good tax preparer can help you get the best refund possible while following the law. A bad tax preparer, however, can make mistakes or even commit fraud, which could cause you big problems.

In this article, we will explain why choosing a tax preparer is important, how to find a trustworthy one, and what warning signs to watch for.

What Does a Tax Preparer Do?

A tax preparer is a person who helps individuals and businesses file their tax returns. Some tax preparers have special training and certifications, while others may have little experience. A good tax preparer can help you:

File your tax return correctly
Find deductions and credits you qualify for
Avoid mistakes that could lead to IRS audits
Follow tax laws to prevent penalties

However, some tax preparers may not follow the rules. If they make errors or submit false information, you could be held responsible. That is why it is so important to choose carefully.

Types of Tax Preparers

Not all tax preparers have the same level of experience or training. Here are some common types:

Certified Public Accountants (CPAs) – CPAs are licensed professionals who must pass tough exams and follow strict ethical rules. They often specialize in tax preparation and financial planning.
Enrolled Agents (EAs) – EAs are certified by the IRS and have passed a tax law exam. They can represent you before the IRS in case of an audit.
Tax Attorneys – These are lawyers who specialize in tax law. They can provide legal advice and help in complex tax situations.
Unlicensed Tax Preparers – Some people offer tax preparation services without any official certification. While some may be knowledgeable, others may not have enough experience or training.

The IRS recommends using a preparer with proper credentials, such as a CPA, EA, or tax attorney.

How to Find a Trustworthy Tax Preparer

To make sure you choose a reliable tax preparer, follow these steps:

1. Check Their Qualifications

Ask if the preparer has a Preparer Tax Identification Number (PTIN). The IRS requires all paid tax preparers to have one. You can also check their credentials by visiting the IRS directory of tax preparers.

2. Look for Reviews and References

Read online reviews and ask friends or family for recommendations. If others have had a good experience with a tax preparer, they are more likely to be trustworthy.

3. Ask About Fees

A professional tax preparer should charge a fair and transparent fee. Be cautious if someone charges based on a percentage of your refund. This could encourage fraud or dishonest practices.

4. Make Sure They Sign Your Return

A legitimate tax preparer will always sign your tax return and include their PTIN. If they refuse, that is a red flag.

5. Avoid Preparers Who Promise Huge Refunds

No tax preparer can guarantee you a big refund. If someone makes unrealistic promises, they may be trying to scam you.

6. Confirm They Use Secure Methods

Your tax information includes sensitive personal details. Make sure your preparer follows proper security measures to keep your information safe.

Warning Signs of a Bad Tax Preparer

While most tax preparers are honest, some may try to take advantage of taxpayers. Watch out for these warning signs:

They do not have a PTIN – All paid preparers must have one.
They ask you to sign a blank tax return – Never sign a blank or incomplete return.
They refuse to sign your return – If they will not sign, it could mean they are trying to hide something.
They promise big refunds before reviewing your finances – Be careful if someone guarantees a high refund before even looking at your information.
They charge fees based on your refund amount – This is a common trick used by dishonest tax preparers.

What to Do If You Suspect a Tax Preparer Is Acting Dishonestly

If you think your tax preparer is acting unethically, take these steps:

Stop working with them – Do not sign anything you do not understand.
Report them to the IRS – You can file a complaint with the IRS if you believe your preparer has committed fraud.
Check your tax return carefully – Before submitting your return, review it to make sure everything is correct.
Seek professional help – If you have concerns, consider hiring a CPA or EA to review your return.

How to Protect Yourself from Tax Scams

Scammers often target people during tax season. Here are some tips to protect yourself:

Only work with reputable tax preparers – Do your research before choosing someone.
Keep copies of all documents – This includes your tax return, receipts, and any paperwork.
Never share personal information over the phone or email – The IRS will never call you to ask for your Social Security number or bank details.
Be cautious of refund anticipation loans – Some tax preparers offer loans based on your expected refund but charge high fees.

The Benefits of Choosing a Good Tax Preparer

Picking the right tax preparer can save you time, money, and stress. A skilled professional can help you:

Get all the deductions and credits you qualify for
Avoid costly mistakes
Reduce your chances of an IRS audit
Stay compliant with tax laws