Tax Preparer Selection Tips

Feb 10, 2014 by

IRS shieldTick, tick, tick, tick. You know it’s coming: April 15, the day your U.S. tax return is due. If you plan to hire a tax preparer this year, you can put to sleep for a while that little man or woman inside of you whispering “you need to start on your taxes!” by at least doing the work to choose a preparer.

A Return Done Right Matters

Remember last year’s fiasco at H&R Block? I’d think long and hard before I chose Block this year, and I’d sure ask a few pointed questions and get written guarantees before I handed over my tax file to that outfit.

Beyond that I think you want to feel very confident of three tax preparation outcomes:

  1. You pay the least tax legally possible.
  2. Your return is completed to the IRS’ satisfaction.
  3. You’re not gouged by fees.

Since we moved to Canada in 2009, we’ve tried three different tax preparers. The U.S. is one of two countries on the planet that requires its citizens to file tax returns regardless of where they live. And of course we must file with Revenue Canada. Finding a tax preparer fluent in both U.S. and Canadian tax law is not so easy, we’ve discovered. The first two preparers we tried proved to be insufficiently knowledgeable. We tried a third preparer last year and we think this one did an excellent job, but it’s costly. We’re going there again this year as we’ve concluded that we have little choice but to pay through the nose if we want peace of mind with respect to our taxes.

10 Tips to Help Choose a Tax Preparer

The IRS recently published its Top 10 list of tips to help choose a tax preparer. Considering they were generated by a massive bureaucracy, the tips are pretty good:

  1. Check the preparer’s qualifications. All paid tax preparers are required to have a Preparer Tax Identification Number or PTIN. In addition to making sure they have a PTIN, ask the preparer if they belong to a professional organization and attend continuing education classes.
  2. Check the preparer’s history. Check with the Better Business Bureau to see if the preparer has a questionable history. Check for disciplinary actions and for the status of their licenses. For certified public accountants, check with the state board of accountancy. For attorneys, check with the state bar association. For enrolled agents, check with the IRS Office of Enrollment.
  3. Ask about service fees. Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can. Always make sure any refund due is sent to you or deposited into your bank account. Taxpayers should not deposit their refund into a preparer’s bank account.
  4. Ask to e-file your return. Make sure your preparer offers IRS e-file. Any paid preparer who prepares and files more than 10 returns for clients generally must file the returns electronically. IRS has safely processed more than 1.2 billion e-filed tax returns.
  5. Make sure the preparer is available. Make sure you’ll be able to contact the tax preparer after you file your return – even after the April 15 due date. This may be helpful in the event questions come up about your tax return.
  6. Provide records and receipts. Good preparers will ask to see your records and receipts. They’ll ask you questions to determine your total income, deductions, tax credits and other items. Do not use a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
  7. Never sign a blank return. Don’t use a tax preparer that asks you to sign a blank tax form.
  8. Review your return before signing. Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it.
  9. Ensure the preparer signs and includes their PTIN. Paid preparers must sign returns and include their PTIN as required by law. The preparer must also give you a copy of the return.
  10. Report abusive tax preparers to the IRS. You can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms at or by calling 800-TAX-FORM (800-829-3676).

What’s Your Plan?

Will you be relying on a tax preparer this year or taking on the task yourself? Have you had any bad experiences with a tax preparer?

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