Nashville, TN – The Tennessee Department of Commerce and Insurance’s (TDCI) Division of Consumer Affairs is offering consumers tips to avoid tax return preparer fraud. Although Tax Day isn’t until April 18th [1], the Division encourages you to file early and vet your tax preparer to avoid fraud.
“If you decide to have a tax return preparer prepare and file your income tax return, it is important to choose that person carefully,” TDCI Deputy Commissioner Bill Giannini said. “Finding a qualified professional takes a little planning and some research, but remember, you are responsible for everything on your return, even when someone else prepares it.
[2]Research and Select Qualified Professionals Only
Tax return preparer fraud or misconduct can happen to anyone, even if you hire a preparer who you believe is professional and honest. For example, a preparer might change your tax return after you’ve approved and signed it, altering income or credits to obtain a bigger refund and then keeping some or all of it.
In some cases, the preparer might steal your whole refund by changing direct deposit information. Another common fraud situation can occur when the preparer files a return without your authorization – he or she might have your information from a prior year, and use that information to file a return for the current year. Or perhaps you met with a preparer and then chose not to hire that person, but the preparer filed a return using your information anyway.
The Division of Consumer Affairs urges Tennesseans to do research before trusting anyone with important tax information.
Check the Preparer’s Qualifications
- Make sure the preparer has a PTIN (Preparer Tax Identification Number) – this is required for all professional preparers.
- Find out if the preparer is affiliated with any professional associations.
- Ask the preparer about his or her education and training – what background does that person have that qualifies him or her to prepare your return?
Check the Preparer’s History
- Check with the Better Business Bureau [3] in your area to see if the preparer has had complaints filed about him or her.
- Check with professional associations to see if the preparer has had any disciplinary actions, and for the status of the preparer’s license:
- For Certified Public Accountants (CPAs):
If the preparer is a CPA, verify his or her license with the Tennessee Board of Accountancy at www.verify.tn.gov [4]. For more information about the Tennessee Board of Accountancy, visit www.tn.gov/regboards [5] or call 888.453.6150. - For attorneys:
Verify an attorney is licensed to practice law in Tennessee by visiting the Board of Professional Responsibility’s website directory [6] at www.tbpr.org [7]. - For Enrolled Agents:
Verify the status of an enrolled agent by contacting the IRS Office of Enrollment [8] at 855.472.5540 or EPP@irs.gov [9].
- For Certified Public Accountants (CPAs):
Ask About Charges and Fees
- Avoid preparers who base their fee on the amount of your refund.
- Try to obtain a clear estimate, preferably in writing, for the preparation and filing services.
Find Out What Services the Preparer Offers
- Does the preparer offer electronic filing?
- Will the preparer be available after April 15th if you have questions or problems? Consider whether the preparer will be around to answer questions about your return months or years after it is filed.
Ask Around
Do you know anyone who has used this preparer? Were they satisfied with the service? If not, why not?
Protect Yourself
- Always get a complete copy of your tax return. Verify that the preparer signed it and included a PTIN.
- Avoid any preparer who asks you to sign a blank return or requires the refund to be direct-deposited to a bank account under the preparer’s control.
Note: Be careful when a preparer claims he or she can get you a larger refund than other preparers. Remember, even if your preparer handles everything involved in completing your tax return, you are still responsible for its accuracy.
For more consumer tips, visit www.tn.gov/consumer [10]. To learn more about tax return preparation, visit www.taxpayeradvocate.irs.gov [11].
About the Tennessee Department of Commerce & Insurance
TDCI is charged with protecting the interests of consumers while providing fair, efficient oversight and a level field of competition for a broad array of industries and professionals doing business in Tennessee. Our divisions include the Athletic Commission, Consumer Affairs, Tennessee Corrections Institute, Emergency Communications Board, Fire Prevention, Insurance, Tennessee Law Enforcement Training Academy, Peace Officers Standards and Training, Regulatory Boards, Securities, and TennCare Oversight.