This year you're turning over your taxes to a professional. You've evaluated the tax preparer options and have decided on which type to hire.
Now you need to make sure the tax preparer is on the up and up.
That's right. Some tax pros are unscrupulous.
They take advantage of taxpayer eagerness to turn over this annual task. They also know they often can count on some filers' eagerness for a bigger refund.
Avoiding bad tax pros: Today's Daily Tax Tip is a collection of advice from the Internal Revenue Service's Criminal Investigation unit on how to spot an abusive tax preparer.
Avoid return preparers who claim they can obtain larger refunds than other preparers.
Avoid preparers who base their fee on a percentage of the amount of the refund.
Use a reputable tax professional that signs and enters a preparer tax identification number (PTIN) on your tax return and provides you with a copy for your records.
Consider whether the individual or firm will be around to answer questions about the preparation of your tax return, months, even years, after the return has been filed.
Never sign a blank tax form.
Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?
Still your responsibility: Remember, regardless of who fills out your 1040 -- your brother-in-law who's an accountant, the tax franchise office down the street or the preparer everyone in the office was using -- you, the taxpayer, are ultimately and legally responsible for the accuracy of all entries made on the returns.
And by return, the IRS means not just the 1040, but also all related schedules, forms and supporting documents.
So be rigorous in vetting the tax pro who will help you file.
Bad tax help's added costs: Intentionally entered wrong information or simple honest errors will cost you. You could face added taxes and penalties.
And if the IRS determines you were complicit in tax evasion, this felony is punishable by up to five years in jail and a $250,000 fine.
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