Tax season is right around the corner and most of us feel comfortable with our tax return preparers. Let’s be honest, most of us conduct a perfunctory review of the return and sign it…BUT who does the IRS say is held responsible for the accuracy for the income and deductions on tax returns – you or the tax return preparer? YOU! The IRS rules for tax return preparers require them to ask questions when an item appears to be incorrect. However, the general rule is that the preparer has no duty to audit the information submitted by the client. Therefore, to avoid potential civil and criminal penalties due to a poorly prepared tax return, it is imperative that executives such as yourself, have a highly competent tax return preparer who will ask the relevant questions, save your time and protect you.
As a former IRS Revenue Agent, U.S. Department of Justice prosecutor, CPA, and tax attorney for over 40 years, believe me when I say that a poorly prepared tax return can not only cause you financial troubles, but may even, in a rare case, result in jail time and ruin your reputation with friends and family. A competent tax return preparer can protect you. Here are a few tips to consider when selecting a tax return preparer:
- Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant or attorney), belongs to a professional organization and attends continuing education classes.
- Check the preparer’s qualifications. Use the IRS Directory of Federal Tax Return Preparers site https://irs.treasury.gov/rpo/rpo.jsf.
- Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN).
- Look for a preparer who is available year-round. Taxpayers may need to contact the preparer after the filing season is over in the event that questions arise.
- Provide records and receipts. Good preparers ask to see these documents and ask questions to determine the client’s total income, deductions and tax credits.
- Check the preparer’s history.
- Check the Better Business Bureau website for information about the preparer.
- For CPAs, check with the State Board of Accountancy.
- For attorneys, check with the State licensing authority.
- For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the IRS Directory at https://irs.treasury.gov/rpo/rpo.jsf.
- The preparer must allow you to review the tax return before signing. Be sure to ask questions if something is not clear or appears inaccurate and to get answers.
Please note that the above guidance is the same expert advice that the IRS would give you. If you have any questions about how to protect yourself, feel free to give me a call, Howard Stone at (312) 659-8441 for a complimentary consultation. You can also email me at email@example.com or fill out this form.
Howard Stone is an accomplished litigator with extensive experience in white collar criminal defense, federal civil and criminal taxation and healthcare law.
In 2019, Howard was recognized as one of the Top 100 Criminal Defense Attorneys of America & awarded the Who’s Who Marquis Lifetime Achievement Award.