CARL WATTS & ASSOCIATES

November 21, 2016

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The Tax Professional
of Your Choice
Every week, with every newsletter and tax topic we bring to your attention we urge you to look for help from tax professionals. With the recent surge of all sort of tax scams, you need to be extra vigilant in your choice of a tax professional.

Even though most tax return preparers are professional, honest and provide good service to their clients, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients by filing false or fraudulent income tax returns.

The IRS advises you to use the following points to assist you when selecting a tax return preparer:

  • Be wary of tax return preparers who claim they can obtain larger refunds than others.

  • Avoid tax return preparers who base their fees on a percentage of the refund.

  • Ensure you use a preparer with a preparer tax identification number (PTIN). Paid tax return preparers must have a preparer tax identification number to prepare all or substantially all of a tax return.
  • Use a reputable tax professional who furnishes his PTIN, signs the tax return, and provides a copy of the return to you (as required).

  • Consider whether the individual or firm will be around months or years after the return has been filed, to answer questions about the preparation of the tax return.
  • Check the person's credentials. Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other tax return preparers may only represent taxpayers for audits of returns they actually prepared.


A paid tax return preparer with primary responsibility for overall substantive accuracy of a return is required by law to sign the return and include a preparer tax identification number (PTIN) on the return.

Even if enrolled agents, certified public accountants and tax attorneys are already required to be licensed, pass an exam and fulfill annual continuing education requirements, beginning January 1, 2011, all paid preparers must have a Preparer Tax Identification Number before preparing returns.


The annual PTIN requirement is part of the IRS’s ongoing effort to enhance tax administration and improve services to taxpayers.
Remember that, although the tax return preparer signs the return, you are ultimately responsible for the accuracy of every item on your return.

At the same time, you should be aware that having a PTIN is an IRS requirement and does not necessarily attest to the professional qualifications of the tax preparer. Therefore, when you choose a tax professional, make sure they belong to a professional organization and attend continuing education classes.

Check on the preparer’s history with the Better Business Bureau to see if the preparer has a questionable history. Also check for any disciplinary actions and for the status of their licenses. For certified public accountants, check with the state boards of accountancy. For attorneys, check with the state bar associations. For enrolled agents, check with the IRS Office of Enrollment.

Make sure any refund due is sent to you or deposited into an account in your name. Taxpayers should not deposit their refund into a preparer’s bank account.

A thorough preparer will request to see your records and receipts. They will ask you questions to determine your total income and your qualifications for deductions, credits and other items. Do not use a preparer who is willing to e-file your return by using your last pay stub before you receive your Form W-2. This is against IRS e-file rules.

Never sign a blank return.  Avoid tax preparers that ask you to sign a blank tax form.

Review the entire return before signing.  Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.

Report abusive tax preparers to the IRS. Some of the red flags include: the failing to sign tax returns they prepare and receive payment for; failing to use a Preparer Tax Identification Number or using an invalid PTIN; failing to provide clients a copy of their tax return; failing to return a client's records; creating false exemptions or dependents; creating false expenses, deductions or credits; creating or omitting income; using an incorrect filing status; altering documents; embezzling a client's refund; using off-the-shelf software or IRS Free File instead of professional software; falsely claiming to be an attorney, certified public accountant, enrolled agent, enrolled retirement plan agent, or enrolled actuary.

You can and should report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.


In just a couple of months a new tax season will begin, so don’t wait any longer and look for a tax professional now. You may want to check with family members, friends, co-workers, or your employer for help in selecting a competent tax return preparer.

You may also want to remember that we are here to help you in any way we can.

Choose wisely, stay safe, and check our newsletters regularly for more news and useful information.
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tel 001 202 350-9002