Why is it important to find a reputable tax preparer? Preparing tax returns after a stressful year, especially after COVID, is the last thing you want to do
The IRS routinely requests taxpayers to keep up to date on constantly evolving rules surrounding potential tax refunds and deductions. These include required forms and considerations, but also understands that these requests might be a little out of scope for many who struggle to keep up amid dozens of other responsibilities and changes. This is why it’s legal to have someone else prepare a tax return for you – provided you do it right.
The most important piece of information to understand is that professional and reputable tax preparers are equipped with the means and permission to create an accurate tax return based on the information you provide, and as such, the actual accuracy of the return will remain your responsibility.
This means the IRS will come to you with questions about the return, even when it’s been prepared by someone else. As such, when choosing to work with a tax preparer, making sure you find a reputable tax preparer with experience is key. This is more important now than ever, in the face of many changes made to both individual and corporate taxes as a result of the coronavirus. Here is what you need to know.
Beware of Unrealistic Claims
The job of a reputable tax preparer is to take the information you provide them with and create an accurate and comprehensive individual or corporate tax return, while advising you on applicable refunds and deductions. They can’t work special magic or persuade the IRS to somehow charge you less than what you owe the government.
They may help you understand what refunds you are and are not eligible for based on the information given, but they will not find exclusive refunds for you, nor find refunds other tax preparers wouldn’t think of. When looking for a reputable tax preparer, look for consistency and accuracy, rather than exaggerated claims.
Ask for Their PTIN!
All professional tax preparers must have a preparer tax identification number (PTIN). This number is provided on your tax return, alongside the preparer’s signature, when you file your tax return. This lets the IRS know that a professional prepared your return, and acts as an additional measure of verification, security, and recourse for taxpayers who have been scammed by abusive return preparers.
Note that a PTIN is also critical if you choose to allow your tax preparer to receive any and all correspondence from the IRS regarding your return, via the third-party authorization checkbox on IRS forms.
What Are Their Professional Qualifications and Credentials?
There are steps and requirements to becoming a professional reputable tax preparer, and the IRS takes fiduciary duty and taxpayer representation very seriously. Only attorneys, certified public accountants (CPAs), and enrolled agents can represent taxpayers before the IRS on matters such as tax returns, audits, collections, and so on.
This is important because should your tax preparer be asked to represent you in the case of an audit, they will need the proper credentials. Only preparers who are seasonally enrolled in the IRS Annual Filing Season Program have the limited right to represent taxpayers whose returns they prepared and signed, should they be audited.
If you want to make sure that your tax preparer can help advise and represent you should the IRS challenge or question your return, you will want a reputable tax preparer with years of experience in accounting, tax advice, and/or tax law.
How Are They Adjusting Returns for COVID?
Individual and employer tax returns will have to be adjusted for the coronavirus measures the Treasury and the IRS has put through, including PPP loan tax considerations (whether they’re tax-exempt, whether they can be used to pay business taxes, etc.), payroll taxes and applicable tax refunds and credits (such as the sick and family leave credit and the employee retention credit, and more.
Deadlines have also been pushed forward to buy taxpayers more time to understand their situation and figure out what does and doesn’t apply to them and their returns.
Who Will Be Preparing Your Tax Return?
When working with a company that offers tax preparation services as part of a larger suite of tax services, it pays to make sure that you know who will be responsible for your specific case – and whether they are qualified, as well.
You should be working closely with your preparer to ensure that the information you provide them is not only accurately used to prepare your tax return, but also safely transmitted and promptly deleted. Don’t work through a middleman! Reassure yourself that all sensitive information is transmitted safely either physically or via encryption, and not needlessly stored.
Never Sign a Blank Tax Form!
Be careful what documents you sign. The IRS warns of abusive practices in tax preparation services not just out of an overeager sense of caution, but because it is a real danger. Tax preparation fraudsters can cost you hundreds of thousands of dollars.
Check Their Reputation and Years of Experience
One of the great benefits of the internet is that it’s an unparalleled archiving tool. If you know where and how to look, you can dig deep on someone’s professional history and competence across years of service. Figure out through in-depth reviews, local testimonials, and real-life stories whether the tax preparation service you are considering is the right pick for you.
Make Sure You Know the Timeline
Tax preparation is not necessarily a simple process, but an experienced tax preparer should be able to tell you what they need, when they need it, how and where your information will be stored and for how long, and roughly when your return will be completed and back in your own hands.
Be Sure You Can Contact Them Thereafter
A reputable tax preparer will only create a return on the basis of multiple forms, total income, your previous deductions, tax credits you know you are eligible for, and other important information. But even then, the IRS may want to know more about your return and may ask you some questions thereafter.
It’s a good idea to know what your tax preparer’s policy is on follow-up questions. What channels should you go through to best get a message to them should the IRS contact you about your prepared return.
Why Having a Reputable Tax Preparer is More Important Than Ever
We each have our own worries and responsibilities. Finding ways to simplify that list can help us focus on other tasks and reinvest precious time into the things that matter most to us. Preparing tax returns after a stressful and exceptional year, especially when given the changes and considerations to make due to COVID, is probably one of the last things on anyone’s mind.
Yet that will not stop the IRS from imposing its deadlines on 2020 tax returns. Come tax season, the IRS will start penalizing taxpayers who haven’t prepared a return and haven’t filed for an extension either.
By working with Rush, you can assure yourself that you’re in good hands. Our credentialed preparers have decades of experience in helping taxpayers make sense of their taxes.