Choosing the Right Tax Professional - Part 2

In previous posts we have discussed steps to take when making a wise decision when it comes to choosing a tax professional. Our last post discussed why it’s important to look now and a couple of things to consider if that is what you need to do. We will now consider two major red flags that might come up in that search.

Look out for “ghost” preparers. A ghost preparer is a paid tax preparer who will not sign the tax return after it is completed. They will insist that the taxpayer sign it and file it themselves. This is against the law. While the taxpayer is responsible for everything in the tax return, if someone is paid to prepare it, they must sign their name. When a person hides their actions in this way it is often a sign that fraud is being committed. If they based their fees on a percentage of the refund or promised to get a bigger refund than anyone else, this is another sign of potential fraud.

A valid ID for tax preparers. Every paid preparer needs to have a valid Preparer Tax Identification Number. It is legally required. When reviewing the completed return before signing you should see that number along with the tax professional’s name. Before choosing a professional, make sure that you have a good understanding of his credentials. Some can represent taxpayers in limited situations, others have unlimited representation rights before the IRS. Enrolled Agents, attorneys, and CPA’s have unlimited representation rights.

Hopefully this information will provide some insight in the search for a tax professional that fits your needs.

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