TOP DRAWER ARTICLE

Choosing a Tax Preparer
by
HL Carpenter

The more things change, the more you … may be thinking of hiring a tax professional to prepare your personal or business return this year.

Increasing tax law complexity and the chance of missing legitimate deductions could make that a wise decision. But before you hand over your financial records, keep in mind you’re responsible for the accuracy of your return, no matter who prepares it, so finding a qualified preparer is critical.

Here are four tips to help you in your search:

1. Check licenses and affiliations. Make sure your preparer is running a legitimate business, including proper licenses and insurance. If these documents are not publicly displayed, ask to see them.

   Look at other certificates on the office walls, too. Preparers who belong to professional associations are required to meet educational and ethical standards in order to maintain membership.

   One more indicator of good business practices: A favorable history with your state’s Better Business Bureau.

2. Ask about fees. An hourly rate or a flat fee is standard practice. Stay away from preparers who base fees on a percentage of your refund. These are known as contingent fees and are prohibited on an original tax return.

3. Watch out for fraudulent tax schemes. You don’t have to be a tax guru to know when something sounds too good to be true. If your preparer promotes schemes such as establishing a trust to deduct your personal living expenses, pick up your records and leave.

4. Find out who will prepare your return. Some preparers hire less experienced personnel during tax season to handle the workload. That may be all right, as long as a seasoned professional is reviewing the final return, but you should be fully informed.

You’ll also want to know if return preparation is being offshored to a foreign country. By law, you have to give consent before your financial information is disclosed to an overseas preparer.

You may feel a bit awkward interviewing a tax preparer. But you’re seeking – and paying for – quality service as well as current knowledge of tax law. Common sense and a little research can help make sure you’re hiring an ethical professional who will provide both.

Originally published January 2008.

Last update: December 30, 2009