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Abusive tax preparers use a variety of methods to file fraudulent or illegal returns to reduce their client's tax liability. While all tax preparers are looking to minimize an individual's obligation to pay, abusive preparers cross the line. They engage not only in minimization strategies but in evasion or fraud on behalf of their clients. Since there is no national rating system for accountants, it can be hard to identify an abusive preparer. Follow these guidelines for assistance.
Pricing and Expense
If a tax preparer schedules pricing based on the return he or she is able to retrieve for you, you may be working with an abusive preparer. For example, some abusive preparers will take a commission out of your refund. Any commission-based preparer has an incentive to attempt to get you a big refund, perhaps bigger than you deserve. If you actually owe money to the IRS, this preparer has no incentive to assure you file those taxes you owe. Avoid commission-based preparers for this reason. It is more acceptable for a preparer to take a commission based on your return's being accepted on the first try than on the fact that you received a big refund.
Transparency
The transparency your preparer shows is a heavy indicator of the preparer's legitimacy as an organization. Does the tax preparer answer your questions in a straightforward manner? Are you invited to review forms before they are submitted? If the answer to these questions is "no," you may be working with a preparer who has something to hide. A tax preparer is working for you, not the other way around. As a result, the preparer should be 100 percent willing to answer your questions and provide you with sufficient information to feel comfortable with your return.
Recommendations and Reviews
In the age of Internet reviews, any good preparer will have plenty of good reviews easily accessible online. You should be able to find your tax preparer in a simple Internet search. In addition, the preparer should be listed on business websites and on review websites in your area. The benefit of these review websites to a casual consumer cannot be underestimated. When any business has bad online reviews, you should steer clear. This is particularly true with a tax preparer because the consequences of working with an unethical individual can compromise your own ethical and legal standings.
Guarantees
A tax preparer who charges you a fee for services should always offer to stick around if his or her services prove insufficient. Look for a preparer that offers to fully review your forms in the case of your return's not being accepted. You should be wary of any tax preparer that will charge you additional fees to resubmit since the preparer himself or herself is likely the individual who made the error. Any ethical preparer will help you in a time of need, particularly during an audit. The individual should have all of your files exceptionally well organized so the audit process is not difficult for you.
