How To Know If Your Tax Preparer Is A Crook

By Beverly Linao | Feb 12, 2016 04:30 AM EST

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Filing income tax returns can be stressful. This is why some people opt to hire a tax preparer to the job. Unfortunately, some aren't so lucky and fall victim to tax crooks. How do you know your tax preparer is actually a crook? Check out the following:

  • Look for identification. The Internal Revenue Service requires all tax preparers to have a Preparer Tax Identification Number. Once you get hold of it, do not immediately go for it. Be sure that you confirm it.
  • Check the person's professional credentials. The IRS website includes a directory of the credentials for a tax preparer. You are giving that person your personal and confidential information. It pays to double check and verify.
  • Ask for your tax preparer's phone, address, etc. and confirm it. This is to make sure that you can still reach him or her after the tax return has been filed. This makes it easy especially in cases wherein your tax return has some unclear sections or information.

On the other hand, you should also be aware of little things that your tax preparer does. These things could be a sign that he or she is actually a crook. The following are some, as compiled by MarketWatch.

  • Fees charged are unusually high or are based on your income tax return. Legit tax preparers usually have fixed fees, so when your tax preparer asks for a certain percentage of your refund, then that should tell you something is not right.
  • Provides wrong information with regard to your ITR entries. If your tax preparer inflates your deductions or expenses, and if he or she does not ask you for any records or receipts, then look for another person to prepare your tax return for you.
  • Does not take responsibility for the filed income tax refund. Instead of declaring that he or she prepared it, your tax preparer would actually tell you to declare that you prepared it yourself and let you sign the file. This is another red flag.

It is very important to note that at the end of the day, it is you - the taxpayer - who will suffer the consequences of a crook. To be sure, you can choose a taxpayer out from the IRS launched database of tax professionals. These are the ones who voluntarily provided proof of their education and credentials.

You can also download some software and do the taxes themselves. 

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