Rev. date: 01/01/2011
If you choose to have someone other than yourself prepare your tax return, choose that preparer wisely. A paid preparer is required, by law, to sign the return and fill in the preparer area of the form. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. A person who prepares tax returns for others should have a good understanding of tax matters. A few states currently require paid preparers to have a license or registration. If your state does not have a license or registration requirement, you may want to check with friends, co-workers, or your employer for help in selecting a "reputable" preparer.
Choose a preparer you will be able to contact in case your return is examined by the IRS and there are questions regarding how your return was prepared. A third party authorization check box on Form 1040
, Form 1040-A
, and Form 1040-EZ
allows you to designate your paid preparer or another third party to speak to the IRS concerning the preparation of your return, payment and refund issues, and mathematical errors. The third party authorization check box gives the designated party the authority to receive and inspect returns and return information for one year from the due date of your return (without regard to extensions). You cannot revoke a "check box" authorization before the 1-year period ends. Please see Tax Topic 312
for information on providing the authority to receive and inspect returns and return information to a third party generally, using Form 8821
, Tax Information Authorization
Most tax return preparers are professional, honest and provide excellent service to their clients. But, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients by filing false income tax returns.
Use the following points for taxpayers to assist you when selecting a tax return preparer:
- Be wary of tax preparers who claim they can obtain larger refunds than others.
- Avoid tax preparers who base their fees on a percentage of the refund.
- Beginning January 1, 2011, a tax return preparer must have a preparer tax identification number (PTIN) to prepare all or substantially all of a tax return if the tax return preparer is being compensated for the preparation of the tax return.
- Use a reputable tax professional who furnishes his PTIN, signs the tax return, and provides a copy of the return to you.
- Consider whether the individual or firm will be around months or years after the return has been filed, to answer questions about the preparation of the tax return.
- Check the person's credentials. Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
- Find out if the return preparer is affiliated with a professional organization that provides its members with continuing education and other resources and holds them to a code of ethics.