How to choose a tax preparer

March 22, 2016

Although we are located in South Carolina, we prepare tax returns for clients all across the country including the state of New York.

For the past few weeks, the state of New York has been on a bit of a tear locking up rogue tax preparers, as have many other jurisdictions including the IRS.  But New York has made a special effort to post the name and image of tax preparers who have been arrested for various scams involving bogus tax returns to the tune of about one a week. (Scroll to the bottom of this article for more details on the arrests).

In light of their recent activities, the state of New York has posted what we think is a pretty good guide to choosing a tax preparer and we would like to share their guide with our readers.  Of course, we think Tax On Wheels, LLC is an excellent choice for your tax preparation needs and we will be happy to assist you with your tax return.  Simply give us a call at 803 732-4288 and we will take it from there.

Following Recent Statewide Tax Preparer Arrests, NYS Tax Department and the NYS Division of Consumer Protection Issue Alert

Tax Department launches new webpage and checklist for taxpayers who are considering hiring a tax preparer.

The New York State Department of Taxation and Finance and the Division of Consumer Protection today issued a consumer warning to the seven million taxpayers who have yet to file income tax returns.

“In light of the recent arrests of tax preparers across New York State, we’re urging taxpayers to ask the right questions before trusting someone with their private information,” said New York State Commissioner of Taxation and Finance Jerry Boone. “Each year, we receive thousands of tax returns based on stolen identities, some of which are submitted by unethical tax preparers. If you choose to hire a tax preparer, follow these easy steps to ensure that the preparer is honest and qualified.”

“The Division of Consumer Protection strongly urges all New Yorkers to practice due diligence when selecting a tax preparer,” said Acting NYS Secretary of State Rossana Rosado. “Always get the terms and total cost of the service in writing. Avoid any tax preparer who charges a percentage of your tax refund as part of the fee. Most important, if you suspect you’re being defrauded by a tax preparer, report that individual to the Tax Department immediately.”

Before you hire a tax preparer

While millions of New Yorkers prepare their taxes without the services of a paid tax preparer, the Tax Department and Division of Consumer Protection encourage taxpayers who are considering a paid preparer to ask these four questions:

  • Are you registered with the IRS and New York State? New York State registered preparers must meet continuing education requirements and minimum qualifications. Attorneys, certified public accountants, and IRS enrolled agents aren’t required to register but do have other professional requirements. Ask to see the preparer’s registration certificate or proof that he or she isn’t required to register. (You can also verify that a tax preparer is registered online.)
  • How much will it cost? Ask to see a list of fees. The fees should be directly related to the services provided and not the refund amount. Also, by law, preparers cannot charge to e-file in NYS.
  • How will I receive my refund? A refund should never be deposited into a preparer’s bank account. The fastest and safest way to receive your refund is to have it directly deposited into your bank account.
  • Will you sign the return? A completed tax return must be signed by both the taxpayer and the preparer. Preparers must also include their federal preparer tax identification number (PTIN) or social security number, and either their NYS registration number or exclusion code. You should never hire a preparer who won’t sign your return, and never sign a return before it’s fully prepared.

Taxpayers should also ensure that the preparer will:

  • base the tax return on actual records and receipts,
  • e-file the return, and
  • be available after the tax return is filed in case questions arise.

Taxpayers can also contact the Better Business Bureau to see whether a tax preparer has a history of consumer complaints.

New York is one of only four states to regulate the tax preparer industry. While most tax preparers are honest and provide excellent service to their clients, taxpayers must remain vigilant to protect themselves from individuals who file fraudulent returns or misuse personal information.

New webpage and checklist for taxpayers

To help taxpayers screen potential tax preparers, the Tax Department published a new checklist available at its Tips for hiring a tax preparer webpage. Before hiring a tax preparer, use the checklist as a guideline when visiting or calling prospective preparers.

File a complaint

If you’re aware of a tax preparer who has engaged in illegal or improper conduct, contact the NYS Tax Department’s Office of Professional Responsibility at (518) 530-HELP (option #2) or file a tax preparer complaint online. The Tax Department will review your complaint promptly and, where appropriate, take corrective action, which may include sanctions.

Recent arrests