Dodging fraud preparers, other tips for tax season

Investigators

RALEIGH, N.C. (WNCN) – Tax season is a prime time for scammers who want to steal money. Before hiring a tax preparer, there are things to look out for when choosing someone to help out with taxes.

Last year, the Better Business Bureau said it received more than 1,400 complaints nationwide about tax preparers who didn’t live up to their claims or outright ripped people off.

Although the tax form is simpler this year, filling it out it can still be stressful for many. The IRS estimated at least 60 percent of people will hire a tax professional this year.

It doesn’t matter if a person uses a big nationwide firm, or an induvial accountant — all accountants need to be properly registered, and it’s easy to check.

“You can go directly to the IRS website,” said Kayla Gilbert of the BBB of Eastern North Carolina. “Type in the person’s name and identification number, and all their credentials should be listed.”

Once a preparer is determined to be legit, a person can also go to the BBB website to see how they are ranked. The BBB assigns letter grades from “A” to “F.”

“Go beyond the letter rating look at the complaints and customer reviews,” Gilbert said. “See what other people are saying to see if whoever you hire is a good fit for whatever tax situation you are in.”

There are different kinds of tax professionals. They include:

  • Enrolled Agents: They are preparers approved by the Internal Revenue Service to represent taxpayers before the IRS. They sometimes work as consultants.
  • Certified Public Accountants: They have a college degree and have passed a state professional qualifying exam that meets other state licensing criteria.
  • Accredited Tax Advisor: They handle complex tax issues such as: planning for owners of closely held businesses and the highly compensated; choosing retirement plans.
  • Certified Public Accountants: Before asking a CPA to prepare taxes, be certain that he or she is also experienced in handling tax matters and is enrolled in a continuing education program to keep updated on the ever-changing tax laws.
  • Tax Attorneys: These people appeal to taxpayers who are interested in legally sheltering part of their income.

The BBB has a more complete explanation of what those various professionals can do for a taxpayer, as well as other information about choosing a preparer.

All those various professionals charge different fees, so be sure you know precisely what needs to be paid.

“Most of them will charge a flat fee, so it’s important to make sure what you are paying for per hour,” Gilbert said. “Get all those charges up front.”

Other things to watch out for:

  • Make sure the preparer can be reached year-round in case of an audit or have other issues with IRS.
  • Be wary of cash advances on a refund because they come with a hefty commission. 
  • Find out how long it’ll take to get the return back after it’s prepared.

Although this year’s tax form is much shorter, it can still create confusion. Those who are going to try to go at it alone, the IRS offers free help online, or in person, but there’s a catch with that.

“We have taxpayer assistance centers all around the country which can be found on IRS.Gov, but I’d like to note they are by appointment only at this point so you’ll need to call in,” said IRS Spokesman Matt Leas. 

The IRS said it expects to issue 90 percent of refunds within 21 days of receiving a return, so consider filing electronically instead of by mail to get your return into the system faster.

Copyright 2020 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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