- Bad Tax Preparers: What to Watch Out For. What to Do If You Have One.
- February 25, 2014 | Author: Bradley Conway
- Law Firm: Bailey & Galyen, Attorneys at Law - Dallas Office
Guess what? It’s tax season again and you know what that means? Guys dressed up as the Statue of Liberty will be standing by the side of the road to lure you into their tax preparation offices.
Now, not all tax preparers are bad, but you should be cautious of who you choose to prepare your tax returns. I get a ton of calls every year from people who’ve had their refunds stolen or had more money than they were told it would cost taken out of their return. There are a few things you can do to protect yourself:
1) Get everything in writing. A lot of problems are caused when the terms of your deal with the tax preparer are left to mere words. If you have a written copy of what the preparer promises to do and what the preparer is charging, you’ll have a much easier time proving that to the police, IRS, or a judge should things go south.
2) Pay them up front. I know a lot of people prefer to let the preparer take their fee out of the refund, but it’s another place where people get cheated all the time. You don’t want the tax preparer to have control over your money when it comes in. People get tempted and if they’ve gotten away with it before, they’ll most certainly try to get away with it again.
3) Review your return. Every tax return requires that the taxpayer sign it, whether it’s pen to paper or electronically. When you sign your tax return you are telling the government that you’ve reviewed all the information and, to the best of your knowledge, it’s correct. I know a lot of people don’t understand the tax part of it, but you can make sure that, if you’re getting a refund direct deposited, that the account number and routing number just above the signature block are correct.
4) Get a copy of everything. This is the only way to truly protect yourself. Get a copy of the contract. Get a copy of your completed return. This will help you protect your refund and at least give you a chance to get your stolen money back.
I can hear you thinking. You’re thinking, “But, Brad, what do I do if I’ve already been scammed?”
The IRS is not going to be super helpful. Once they send out the return they’re not going to bother helping you get it back. You can file a Form 14157 to let the IRS know that the preparer you used is stealing returns, but, that’s not going to help you get your return back, but it might keep the same thing from happening to others.
Another option is to contact the local police and file a report. Again, the police may not be very helpful and may tell you that it’s a civil matter. The end result is that, once again, nothing gets done.
Your only other options are to file a small claims suit yourself or to contact a lawyer and have them write a letter to file a suit on your behalf. Letter writing isn’t too expensive, but filing a suit might be. Regardless, neither method is assured to get your return back. Even if you get a judgment, getting that money out of them might be a problem.
Overall, it’s just best to be careful. Know who’s doing your taxes and know where your refund is going. If you have IRS problems created by a bad preparer, contact a tax professional ASAP. Ignoring an IRS problem will never make things better.