The 2022 tax season kicks off on January 24th. There are several free or low cost online tax preparation services available (including the IRS Free File program) that allow you to conveniently prepare and file your taxes from the comforts of home. If, however, you decide to pay someone to prepare your taxes, be extra careful and vigilant when selecting a tax preparer. Remember, you are ultimately responsible for the information reported on your return regardless of who prepares it.
Use the following checklist to help you in selecting a qualified tax return preparer:
1) Check the IRS Directory of Federal Tax Return Preparers.
Use the IRS Directory of Federal Tax Return Preparers to research tax return preparers near you, or to determine the type of credentials or qualifications held by a specific tax professional. This searchable and sortable public directory will help you find a tax return preparer with specific qualifications.
Note, all tax return preparers are not in listed the directory. The directory contains only those with a PTIN who hold a professional credential or have obtained an Annual Filing Season Program Record of Completion from the IRS. If you're considering using a return preparer who is not listed in the IRS's directory, be sure to ask that person: (1) about their professional credentials; and (2) whether they completed the IRS's Annual Season Program---if they say yes, the person should appear in the IRS directory.
2) Check the preparer's history with the Better Business Bureau.
Be sure to check for any disciplinary actions taken against credentialed tax return preparers. For Certified Public Accountants (CPAs), check with your state's Board of Accountancy. For attorneys, check with your state's Bar Association. For enrolled agents, verify the agent’s status on IRS.gov.
3) Ask about preparation fees. THIS IS A MUST!
The tax return preparer industry is ripe with fraud and deceit. Please be sure to ask your preparer about the specific fees they charge before allowing them to start working on your tax return. Avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own financial accounts. Be wary of tax return preparers who claim they can get you larger refunds than their competitors. And lastly, before you leave the tax preparer's office, be sure to obtain a copy of your filed tax return and an itemized copy of the preparation fees.
4) Ask if the preparer plans to use IRS e-file.
You should make sure your preparer is able and willing to file your return electronically with the IRS through e-file. Filing a paper return will significantly delay receipt of any tax refund---sometimes by more than a year.
5) Make sure the preparer is readily available.
You should check whether the tax return preparer will be around after the filing deadline has passed because you may need the preparer to answer questions about the preparation of the tax return. Some preparers completely disappear once tax season ends, which can cause a lot of problems and frustration if an issues arises with your tax return later in the year.
6) Ensure the preparer signs the return and lists their PTIN on the return.
Paid tax return preparers must have a preparer tax identification number (PTIN) to prepare tax returns. Under federal law, preparers must sign each return they prepare and list their PTIN on the return. Before your preparer files your return, he or she should provide you with a copy to review. During your review of the return, check down in the "Paid Preparer Use Only" section at the bottom of page 2 of the return and make sure the preparer has filled in all their contact information, including listing their PTIN. Also, DO NOT leave the preparer's office until he or she provides you with a copy of your FILED tax return---you'll want to make sure the preparer did not delete anything from the "Paid Preparer Use Only" section before filing the return with the IRS.
7) Understand the tax preparer's credentials.
It is important to understand that not all tax professionals are the same or have the same proficiency level when it comes to preparing tax returns. MTR recommends choosing either an enrolled agent, CPA, or tax attorney because these individuals possess the requisite educational knowledge and credentials to accurately prepare your return in accordance with the Internal Revenue Code. These individuals also have unlimited practice rights and can represent taxpayers on any tax matter before the IRS.
If you cannot find an enrolled agent, CPA, or tax attorney to prepare your return, MTR recommends finding a professional who has completed the IRS's Annual Filing Season Program. These individuals have dedicated sufficient time to learning about the changes in the tax laws and are generally well-prepared to file most types of returns. These individuals are also listed in the IRS's Directory of Federal Tax Return Preparers (see paragraph 1 above) and they some limited practice rights before the IRS.
About the Author
Attorney Jordan D. Howlette is the President of MyTaxRights, LLC and the managing-member of JD Howlette Law, LLC, a civil litigation firm that represents individuals and businesses involved in tax disputes with the IRS, the United States Department of Justice (DOJ), and various state departments of revenue. A former trial attorney with the DOJ’s Tax Division, Jordan leverages his extensive background in tax litigation to educate others about their federal tax rights and responsibilities. Each tax season, Jordan also volunteers as a tax coach with the Center for the Advancement of Tax Equity, where he teaches others how to self-prepare and file their taxes through the non-profit's free tax clinics.