BBB's Advice for Choosing a Tax Professional 2/3/14
February 3, 2014
It’s tax time! When your employer hands you your W-2 form, it can be tempting to rush out and get your taxes done so you can get your refund sooner. But, BBB serving Central, Coastal, Southwest Texas and the Permian Basin encourages taxpayers to take the time and use caution when selecting a tax preparer to avoid mistakes that could result in additional fees.
Most of us enlist the help of a tax preparer or tax software to file taxes. Unfortunately, every year BBB receives thousands of complaints from consumers against tax preparers. In fact, BBB has seen a rise in complaints over the last three years.
In 2013, BBB received nearly 4,000 complaints against tax return preparation businesses across the United States. Common complaints state that the tax preparer made errors in their return which resulted in fines and fees. Other complaints allege customer service, billing and contract issues.
There is also the risk of tax identity theft. This occurs when someone uses your Social Security number and personal information to file a tax refund in your name. According to the Federal Trade Commission’s 2012 Consumer Sentinel Network Data Book, statistics show tax identity theft accounted for over 40 percent of identity theft complaints.
BBB offers the following advice when searching for a tax preparer:
• Ask around. Get referrals from friends and family on who they use. Check the BBB Business Review of the tax preparation service you plan to use at bbb.org for detailed complaint information. Use checkbbb.org for a list of BBB Accredited Businesses.
• Look for credentials. Ideally, your tax preparer should either be a certified public accountant, a tax attorney or an enrolled agent. All three can represent you before the IRS in all matters, including an audit.
• Don’t fall for the promise of a big refund. Be wary of any tax preparation service promising larger refunds than the competition. Avoid any tax preparer who bases 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, make sure you are able to contact you tax preparer at any time of 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 the case of an audit.