STATELINE (WIFR) -- Anticipated tax refunds can cause consumers to rush to get their taxes filed as soon as possible. However, being careless about selecting tax preparation help could delay an expected refund, and also may open up consumers to fraud and I.D. theft. The BBB encourages taxpayers to use caution when selecting an outside tax preparer.
“Many consumers seek some form of assistance in filing their returns,” said Dennis Horton, director of the Rockford office of the Better Business Bureau. “Not thoroughly researching the tax preparer can cause problems ranging from minor inconveniences to major troubles. Fines, additional fees, and a great deal of hassle can be the outcome.”
Horton reminds consumers that even though the tax preparer completes the tax return, it’s the taxpayer who is ultimately responsible for the accuracy of the paperwork and meeting the filing deadline.
Consumers should also be aware that some tax preparation businesses are open for only a few months every year. It may be hard to track down the preparer if there are problems after a tax service office closes.
The Internal Revenue Service also has issued warnings about online tax-related schemes that can steal taxpayer’s identities. For example, scam emails may state there is an issue with a refund, that the taxpayer is being audited, or that there’s a delay in processing the tax return. Links in the emails usually go to a scammer’s website, which will then ask for Social Security numbers, bank account or credit card information.
“The IRS doesn’t contact taxpayers by email,” noted Horton, “and it won’t request personal or financial information, or inform you of an audit by email either.”
Here are some tips for selecting a tax preparer:
• Ask around. Get referrals from friends and family about who they use, and check the BBB Reliability Reports on tax preparation services at www.bbb.org
• Look for credentials. Ideally, your tax preparer should be a certified public accountant, a tax attorney or an enrolled agent. All three can represent you before the IRS in matters, including an audit. Also, find out if the preparer is affiliated with a professional organization that holds its members to a code of ethics.
• Don’t fall for the promise of a big refund. Be wary of any tax preparation service that promises larger refunds than the competition, and avoid any tax preparers who base their fee on a percentage of the refund.
• Think about accessibility. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors, or in case of an audit, you might need to be able to contact your tax preparer throughout the year.
• Read the contract carefully. Read tax preparation service contracts closely to ensure you understand issues such as how much it is going to cost for the service, how the cost will be affected if preparation is more complicated and time consuming than expected, and whether the tax preparer will represent you in case of an audit.
• Check your return. Before you sign the return, read it over to check for mistakes. Ask the preparer to explain anything you don’t understand and don’t forget to sign it.