During tax season Better Business Bureau of Southern Arizona advises taxpayers to take the proper steps to avoid making mistakes when selecting tax preparation help to avoid costly mistakes on their returns.

Since the beginning of January, BBB has received over 500 inquiries from consumers into Southern Arizona tax preparation services- a 95 percent increase over the same period a year earlier.

“The increase in our inquiries about tax preparation shows that people are being more cautious about who they choose for assistance in their taxes,” said Kim States, BBB president. “Your BBB advises taking the time to be thorough the first time around to avoid a headache in the future.”

Denisse DiPierto, owner of Ms. Tax- a Tucson accountancy- told BBB that consumers should take a long look at a tax preparer’s track record before bringing their business to them.

“Consumers should go to an experienced and ethical professional who knows the tax law,” DiPierto said. “The cheapest isn’t always the best- you want someone who really knows the tax laws, and will take every allowable deduction on your behalf.”

DiPierto stressed that since taxes and financial matters have so many legal ramifications it’s extremely important that consumers do their homework before hiring anyone. BBB reminds consumers that if a mistake is made on their tax return the IRS will hold them solely responsible for it, not their tax preparer.

BBB Tips:

Ask around. Get referrals from friends and family on who they use, and check the BBB Reliability Report on tax preparation services free-of-charge at www.tucson.bbb.org.

Look for credentials. Ideally, tax preparers should either be a certified public accountant, a tax attorney, or an enrolled agent. All three can represent taxpayers before the IRS in all matters, including an audit. Also, find out if the preparer is affiliated with a professional organization that holds its members to a code of ethics.

Don’t fall for the promise of a big refund. Be wary of any tax preparation service that promises larger refunds than the competition, and avoid any tax preparers who base their fee on a percentage of the amount of the refund.

Think about accessibility. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors, or in case of an audit, consumers need to be able to contact their tax preparer throughout the year.

Read the contract and know what you’re paying for. Consumers must read tax preparation service contracts closely to ensure they understand issues such as, how much it is going to cost for the service, how the cost will be affected if preparation is more complicated and time consuming than expected, and whether the tax preparer will represent the consumer in case of an audit.

For more trustworthy advice from BBB on tax preparation visit www.tucson.bbb.org or call (520)888-5353.

Better Business Bureau of Southern Arizona warns taxpayers that they are not exempt if their tax returns are prepared improperly by third-party professionals. BBB advises consumers to evade unqualified tax preparers:

Designations: All tax professionals should be able to provide proof of credentials. Turn to the Internal Revenue Service for insight on Enrolled Agents or EAs.

Standings: Check for registration status and disciplinary actions through state and federal agencies. Beware of unanswered or unresolved complaints on bbb.org.

Advertisement Claims: Watch out for those who assert that they can secure higher refunds or deliver faster than other professional preparers.

PTINs: Ask preparers to disclose Preparer Tax Identification Numbers or PTINs before providing services. PTINs should also be enclosed on completed tax returns.

Service Fees: Get costs upfront and in writing. Look for flat fees; avoid rates that fluctuate based on refund percentages.

Electronic Filing: Paid preparers should be able to process returns electronically through IRS e-file, unless clients opt to file paper returns instead. The IRS lists authorized e-file providers.

Documentation: Be wary of those who offer to file without W-2s, records or receipts. Review returns and other tax forms carefully; be skeptical of preparers who try to rush the process, don’t answer questions and encourage clients to sign blank documents. After filing, retain original W-2s and copies of completed tax returns with preparer signatures and PTINs.

Contacts: Ensure preparers will be accessible in case questions or issues arise, even after April. Collect full contact information.

Taxpayers have the right to prepare their own returns. The IRS offers resources at irs.gov/filing.

Consumers expecting a tax refund might be looking forward to filing their taxes early this year, but Better Business Bureau of Southern Arizona warns to be cautious of tax preparers who claim they can get larger refunds than their competitors.

According to IRS investigators, some preparers may use their clients’ personal information to file falsified returns, and may keep most of the fraudulent refund for themselves while leaving you on the hook.

It’s important to note that the taxpayer is ultimately responsible for the accuracy of all information on a tax return, even if someone else prepares it.  Individuals with fraudulent tax returns can face significant prison time as well as payment of back taxes with interest and penalties.

BBB recommends following these tips from the IRS:

• Avoid preparers who base their fee on a percentage of the refund.
• Use a reputable tax professional who signs the tax return and provides you a copy.
• Consider whether the individual or the tax preparation firm will be around to answer questions about the tax return months, or even years, after the return has been filed.
• Check the preparer’s credentials.  Only attorneys, certified public accountants and enrolled agents can represent taxpayers before the IRS in matters including audits, collections and appeals.
• Find out if the preparer is affiliated with a professional organization that provides its members with continuing educational resources and holds them to a code of ethics. (more…)