WASHINGTON, D.C. — The Internal Revenue Service (IRS) has issued a crucial reminder to taxpayers, stressing the importance of selecting a trustworthy professional for tax return preparation. The agency warns that while most tax preparers provide honest and quality service, some could pose risks through fraudulent activities, identity theft, and other scams.
The IRS emphasizes the importance of understanding who is preparing your tax return and what relevant questions to ask when hiring an individual or firm. One of the key reasons to exercise caution when choosing a tax preparer is that taxpayers are ultimately legally accountable for all information on their income tax return, regardless of who prepares it.
To assist taxpayers in this process, the IRS has compiled a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This resource aims to help individuals find a tax professional adhering to high standards. There’s also a special page on IRS.gov titled “Choosing a Tax Professional,” offering guidance on making informed choices, including selecting someone affiliated with a recognized national tax association.
Taxpayers’ needs will determine the type of tax professional best suited for them, as there are various categories of tax professionals. However, the IRS cautions taxpayers to be alert to red flags that could indicate untrustworthy tax return preparers.
One such warning sign is a preparer refusing to sign a tax return, which could suggest a dubious attempt to make a quick profit by promising a hefty refund or charging fees based on the refund size. These unethical “ghost” preparers typically print the return and instruct the taxpayer to sign and mail it to the IRS. For electronically filed returns, they prepare the tax return but decline to digitally sign it as the paid preparer. The IRS strongly advises avoiding this type of unethical preparer.
Additionally, taxpayers should always choose a tax professional with a valid Preparer Tax Identification Number (PTIN). By law, anyone paid to prepare or assists in preparing federal tax returns must have a valid PTIN. Paid preparers are required to sign and include their PTIN on any tax return they prepare.
The IRS also offers several tips for choosing a tax return preparer. These include looking for a preparer who is available year-round, reviewing the preparer’s history, asking about service fees, finding an authorized IRS e-file provider, providing records and receipts, understanding the preparer’s credentials and qualifications, never signing a blank or incomplete return, and reviewing the tax return before signing it.
If taxpayers encounter misconduct by a preparer, they can report it to the IRS using Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax return preparer filed or altered their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.
The IRS’s warning highlights the importance of vigilance and due diligence when choosing a tax preparer, particularly amid the rise in tax-related frauds. The agency’s resources and tips offer valuable guidance for taxpayers seeking trustworthy professionals to navigate the complex task of tax preparation.
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