How to Spot a Bad Tax Preparer

    

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Are you looking for a tax professional that can assist you in preparing your federal income tax return? If so, you might think that most tax preparers are professionals who have been well trained in the Internal Revenue Service tax code. However, some so-called tax preparers may not be truly qualified to handle your return. In fact, there may even be a few scam artists out there masquerading as tax professionals. Here are a few tips to help you learn how to spot a bad tax preparer.

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Possible Red Flags

The first warning sign that your tax preparer may be unqualified is if he or she doesn't ask you for documents to support your tax claims. For example, if you qualify to claim the Child Tax Credit, then you'll have to provide a Social Security number for your qualifying child. If your tax professional doesn't ask you for a valid Social Security number as proof of your child's eligibility, then he or she may not be qualified.

Another warning sign is if your tax preparer encourages you to fudge the numbers to increase for your refund. This commonly happens with small business owners who may find that they owe a large amount of income taxes on their return. An untrained tax preparer may advise them to increase their expense amounts on the forms to reduce their taxable income. This is both dishonest and illegal.

You might also be working with a poor tax preparer if he or she promises to file your return without your W-2 form. While it's true that you can use your last pay stub to estimate your prospective tax refund, the IRS will not accept your return and process a refund until your W-2 form has been issued. Any tax preparer who claims differently is not being honest with you.

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How to Avoid Being Scammed

What you can do to avoid falling for a tax scam? A great way to spot a fraudulent preparer is to ask to see the person's PTIN - Preparer Tax Identification Number. This number, which is issued by the IRS, serves to identify that the tax preparer has been registered as a tax professional with the IRS. If your preparer doesn't have one of these numbers, find another one who does.

Tax time is already stressful enough for many taxpayers. Why add to it by entrusting your financial information to someone who's either unqualified or untrustworthy? If you use these tips, you can file your tax return with confidence, knowing that you've chosen a tax professional you can trust.

 

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