CHOOSING A TAX PREPARER

Los Angeles Internal Revenue Service Director Frederick Nielsen has announced that his office will “increase its efforts” this year to take action against “tax return preparers who flagrantly create or inflate deductions and/or exemptions.” The IRS suggests that taxpayers:

Choose a firm or individual who is in business year-round. Should you receive a notice regarding the return or an audit, the preparer will be available to explain the items in question or represent you.

Talk to the preparer regarding the information or documentation needed to prepare the return. A reliable tax preparer will obtain background information and request a copy of your prior year’s return in addition to the current year’s Forms W-2, 1099 and receipts.

Stay away from preparers who offer to provide documentation to support false or exaggerated deductions. This will only add to your problems and increase the likelihood of prosecution.

Ask friends and relatives for a referral. Prior experience is usually reliable. Do not choose preparers based on the amount of refund they promise you. Choose preparers based on their reputations for accuracy, honesty and knowledge of the tax laws.

Check the completed return before signing it. Question the preparer on any item you do not understand because you may have to explain the item if you are audited.

Obtain a copy of the return from the preparer. You should have a copy for future reference.

Source: Treasury Department, Internal Revenue Service