New tax laws help create confusion that dishonest preparers can capitalize on

Rick Walz
·3 min read
Rick Walz writes the "Consumer Advocate"
Rick Walz writes the "Consumer Advocate"

Tax season is coming, and many COVID-19-related tax laws are still very confusing. This will lead many to visit a tax preparer to help them navigate new circumstances. In a time of confusion, scammers are on high alert.

New tax laws can help create confusion that dishonest preparers can capitalize on, so taxpayers should always review their returns before signing. Be sure to ask questions on entries you do not understand. Also, make sure you get a copy of the return for your records. Be careful to never sign a blank tax form or one filled out in pencil and make sure whatever you sign is official and legitimate.

Be wary of any tax preparation service that promises larger refunds than their competition and avoid tax preparers that base their fee on a percentage of the refund. Also be wary of “refund anticipation loans,” which can take a hefty chunk of your refund in commission. Refunds are processed quickly these days, so it’s usually a better bet to just wait for the real thing rather than pay a premium to get it now. If a deal seems too good to be true, it probably is.

Use BBB’s tips to find a tax preparer you can trust:

• Get referrals. To find a tax preparer, start by asking friends and family for recommendations, then check BBB Business Reviews at BBB.org. Look beyond the letter grade; complaint details and Customer Reviews will tell you about others’ experiences.

• Make sure they are properly registered. A tax preparer must obtain a PTIN from the IRS. Never let someone work on your taxes unless they have this number. Don’t be afraid to ask about this or other qualifications; a capable professional does not mind questions.

• Look for credentials. Anyone with a PTIN can prepare your tax forms for you, but some tax preparers have more training and qualifications than others. Enrolled agents, certified public accountants (CPAs) and attorneys have unlimited rights to represent their clients to the IRS on all matters. Other preparers can help you with forms and simple IRS matters, but are limited otherwise, and they can’t help you if they didn’t prepare your form.

• Search for free tax programs. There are several free government programs that prepare taxes free of charge if you meet an income requirement; go to the IRS’s Free File page for more information. Most will also file your state return as well. If not, check with your state’s Department of Revenue to find out about their programs. Always make sure the website you’re using is legitimate and free of spelling and grammatical errors.

• Tax software and apps. If you plan to file yourself, use tax software or an app that provides both excellent data security and good customer service. Some of the top names in tax prep software are BBB Accredited Businesses, so check with BBB.org first.

For more tips from BBB, visit BBB.org. And if you spot a scam, whether you have lost money or not, report it to BBB’s Scam Tracker at BBB.org/ScamTracker and the FTC at ReportFraud.ftc.gov. Your story can help other consumers avoid similar scams.

Rick Walz is the President and CEO of the Better Business Bureau serving Northern Indiana, which serves 23 counties. Contact the BBB at 800-552-4631 or visit www.bbb.org.

This article originally appeared on South Bend Tribune: Consumer Advocate: Tips for trusting a tax preparer