The IRS issued a list of 12 common tax scams in 2019. Now, as we enter the second tax season under the Tax Cuts and Jobs Act, the scams and gambits will change some, but tax preparer fraud will likely remain on the list in 2020.
As is the case whenever working with financial professionals, it is wise to pick a reputable tax preparer who provides high-quality service at a reasonable price. Moreover, it is best to start the process now rather than waiting until April when they will be too busy to take on additional clients.
“Tax professionals provide an incredibly valuable service to taxpayers and our nation’s tax system,” said IRS Commissioner Chuck Rettig. “We encourage people to carefully choose who they trust with their most sensitive tax and financial information. There are some simple steps taxpayers can follow to make sure they’re getting good, professional help.”
What to look for in a tax preparer
An estimated 53.5% of taxpayers hired someone to prepare their taxes, and there are scammers out there who take of advantages by taking credits or deductions that the client is not entitled to claim. Scammers do this to increase their fees.
Things to consider when choosing a tax preparer include:
- Look for a preparer who is available year-round in case there are questions about the return or an audit.
- Ask for the preparers IRS Preparer Tax Identification Number (PTIN), which all paid preparers are required to have.
- Ask if they have professional credentials such as a certified public accountant (CPA) or a tax lawyer and then go to the s website to confirm those claims.
- Ask if they have taken continuing education classes to understand the new tax laws better.
- Check the Better Business Bureau’s website to make sure the preparer is reputable.
- Ask about service fees and be wary if they make claims about getting big refunds or charge based on the amount of the return.
- Make sure they e-file, which tax preparers must do if they have more than ten clients.
- Ask how long the process of preparing a client’s taxes takes.
Attorneys can also provide guidance
Whether it is providing straightforward tax guidance or trying to resolve a dispute with the IRS, tax law attorneys can also be a tremendous help in protecting taxpayers, particularly if the taxpayer was scammed by an unscrupulous preparer.