BBB Received Thousands of Complaints about Tax Preparation in 2012
It’s a New Year and time to start figuring out your taxes – or at least figuring out who will do your taxes. With recent passage of new tax laws, even consumers who normally wouldn’t use a tax professional might want to rethink that.
In 2012, Better Business Bureau nationwide received 2,748 complaints about tax preparation services and 1,063 against tax consultants and representatives. Consumers reported that their returns had preparation errors, that they were overcharged for services, and that some or all of their refunds were delayed or not received.
Consumers in several states across the country, including Connecticut, even complained their returns were filed by preparers without all of the necessary paperwork and without their permission.
According to the Internal Revenue Service (IRS), 80 percent of Americans enlist the help of a tax preparer or tax software when filing taxes. Taxpayers are legally responsible for their tax returns if prepared by someone else. This is why it’s important to choose carefully when hiring an individual or firm to prepare your return.
New regulations require all paid tax return preparers to have a Preparer Tax Identification Number. IRS advises using only tax specialists who sign the returns they prepare and enter their PTIN.
In addition, your BBB recommends that you:
Ask for referrals - Find out who your friends, family or colleagues use for their taxes and then check their BBB Business Reviews at www.ct.bbb.org. Check for any disciplinary actions and licensure status through the state boards of accountancy for CPAs, the state bar associations for attorneys and the IRS Office of Enrollment for enrolled agents.
Check credentials - Is the preparer a CPA, a tax lawyer or an enrolled agent? Will the preparer sign your return and provide you with a copy? Does the preparer belong to a professional organization that requires members to adhere to a code of ethics?
Be wary of promises - Until the preparer knows your situation, there is no way to guarantee whether you’ll get a refund or how big it will be.
Check accessibility - You may need to contact your preparer after the tax season is over. Ask whether he or she will be available? Will the return be filed electronically? Any paid preparer who prepares and files for more than 10 clients must do so electronically unless a paper return is requested.
Know what the service will cost - Does the fee cover changes to your return? Will it increase if you have a complicated return? Will the preparer represent you in case of an audit? Make sure any refund due is sent directly to you or deposited into an account in your name.
Review the return before signing it - Never sign a blank return. Make sure you receive a copy of the return for your own records, and make sure the paid preparer signs it.
-Submitted by Howard Schwartz, Executive Communications Director Connecticut Better Business Bureau