Tuesday, May 29, 2012, AM | Leave Comment
Find a good tax preparer even if it is not the tax return filing season which may turn to be the best time to find one. You have more time to do your research. When it comes to filing tax returns, many folks are overwhelmed by fear and confusion.
A majority of income tax preparers are people who are skilled in the preparation of tax returns and can make sense of all the forms for you.
All tax preparers are not created equal…
However, in a limited study of tax returns completed by unlicensed paid preparers, 17 out of 28 – or 61% – were prepared incorrectly, including one that showed the taxpayer owing $4,903 more than he really did, according to a study by the Treasury Inspector General for Tax Administration (TIGTA), which provides independent oversight of IRS activities.
While most of the mistakes resulted in an underpayment of taxes or a too-big refund, sometimes it was the taxpayer, not the government, who would have paid for the mistake, according to a study by TIGTA auditors.
The study focused on unlicensed and non-enrolled preparers, specifically those who were not certified public accountants, enrolled agents or tax attorneys. Enrolled agents must pass an IRS test and are essentially approved by the IRS to practice.
There are an estimated 800,000 non-enrolled and unlicensed tax preparers, according to the National Association of Tax Professionals, which represents tax preparers both licensed and unlicensed.
Problem with some tax preparers
The problem is, anyone is allowed – regardless of training, experience, skill or knowledge – to prepare federal income tax returns for others for a fee.
Only two states, California and Oregon, require these preparers to register with state agencies and meet continuing-education requirements.
Currently, proposed bills in the U.S. House and Senate aim to better regulate tax-return preparers.
This effort has been going on since the beginning of the Republic for which it stands except perhaps the two chambers of Congress which seemingly stand for nothing other than to oppose the President who does not belong to their own party.
Do your own research
Given that taxpayers are ultimately responsible for the information filed on their return, it is extremely essential that consumers be careful when hiring a paid tax preparer, whether licensed or not. Even licensed professionals may make mistakes.
Whether you go with a licensed or unlicensed preparer, it’s important to assess whether there are any complaints against that person. That’s easier to do when the tax preparer is licensed or registered with a state or other agency.
Check out the tax preparer
Check the paid tax preparer with the following organizations:
In a Nutshell
You can do your own research before the tax season is upon us to find a good tax preparer.