RALEIGH, N.C. (WNCN) – Friday is the first day you can begin to file your 2020 taxes and major changes in the tax code as well as your personal situation may make you seek out a professional tax preparer.
However, you need to be careful who you hire to avoid being scammed by a less-than legit tax preparer.
When it comes to entrusting your taxes to someone else, it’s vitally important you work with a person who knows what they are doing.
“The first thing to do is a self-assessment,” said Alyssa Parker with the BBB of Eastern North Carolina. “Understand what your needs are.”
Not all tax preparers are created equal. There are preparers with different skill levels for consumers who file more or less complicated returns.
- Non-credentialed tax preparers (part-timers who only work seasonally usually for tax prep firms)
- Enrolled agents (A preparer approved by the IRS to represent taxpayers)
- Certified public accountants
- Tax attorneys
No matter who you choose, all need to have an IRS approved PTIN or Preparer Tax Identification Number.
That shows the IRS knows who they are.
The BBB said be wary of firms or people who say “we can get you huge, huge refunds.”
“If a tax preparer promises you a larger refund than the competition, that’s a huge red flag,” said Parker.
Before you give up your return to a preparer, make sure you know what the fees will be ahead of time.
“Read the contract and understand how much they charge for their services,” said Parker. “See if there are any extra fees for e-filing, extra fees federal, or local returns, as well as for unexpected complications.”
The IRS Criminal Investigation Division also warns taxpayers to:
- Look for a preparer who is available year-round (in case you are called in for an audit)
- Never sign a blank or incomplete return
- Make sure the refund goes to you not the preparer
The IRS also recommends you file electronically.
This year, the agency remains shorthanded because of COVID-19 and it says electronic returns can be processed faster.