Blog: How to Pick the Right Tax Preparer

Added February 27, 2008 by Melanie G. Rogers

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More than half of the 120 million U.S. taxpayers hired a tax preparer last year, according to the Chicago Better Business Bureau. And not all of them were happy with the results.

About 19 percent of consumers complained about billing and another 19.5 percent complained that their tax preparer was unresponsive. Seven percent complained that the company was rude and 6 percent said they did not get their refund.

The most egregious? More than 6 percent had tax preparers who never filed their taxes at all!

You're responsible when there's a mistake - not your tax preparer - so pay attention.

What can you do? Be really careful in who you hire to do your taxes. And follow these tips from the BBB:

Ask around. Get referrals from friends and family on who they use, and check the BBB Reliability Report on tax preparation services free-of-charge at www.bbb.org/.

Look for credentials. Ideally, tax preparers should either be a certified public accountant, a tax attorney, or an enrolled agent. All three can represent taxpayers before the IRS in all matters, including an audit. Note that enrolled agents have extra training. Also, find out if the preparer is affiliated with a professional organization that holds its members to a code of ethics.

Don't fall for the promise of a big refund. Be wary of any tax preparation service that promises larger refunds than the competition, and avoid any tax preparers who base their fee on a percentage of the amount of the refund. (And don't get a refund anticipation loan - waiting 10 days to get an electronic refund is worth it to save fees and hefty interest.)

Think about accessibility. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors, or in case of an audit, consumers need to be able to contact their tax preparer throughout the year.

Read the contract and know what you're paying for. Consumers must read tax preparation service contracts closely to ensure they understand issues such as how much the service costs, how the cost will be affected if preparation is more complicated and time consuming than expected, and whether the tax preparer will represent the consumer in case of an audit.

Some other helpful Web sites are: National Association of Enrolled Agents - go to the section for taxpayers www.naea.org/MemberPortal/ American Institute of Certified Public Accountants - consumer information section - www.aicpa.org/Consumer+Information/Find+a+CPA/

Feb. 27, 2008

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