Don’t Let Tax Scammers Steal Your Money: Essential Questions Every Taxpayer Must Ask Before Hiring

When tax season arrives or tax problems mount, finding the right professional help becomes crucial. Unfortunately, the tax industry attracts both legitimate experts and dangerous scammers who prey on vulnerable taxpayers. While most tax return preparers are trustworthy and provide high-quality service, some engage in fraud, identity theft and scams. Protecting yourself requires asking the right questions and recognizing red flags before you hand over your sensitive financial information.

Essential Credentials Questions

The first and most important question to ask any tax professional is simple: “Do you have a Preparer Tax Identification Number (PTIN)?” Anyone who charges a fee to prepare taxes must register with the IRS and receive a preparer tax identification number. In addition to signing your completed return, the tax preparer is required by law to enter this number on any return he or she prepares. If you end up hiring someone who doesn’t have a PTIN, the IRS could hit you with a slew of penalties, fees and other legal actions.

Beyond the basic PTIN requirement, inquire about their professional credentials and qualifications. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. Ask to see proof of their registration or professional licensing, and don’t hesitate to verify these credentials independently through state boards or professional organizations.

Fee Structure Red Flags

How your tax professional charges fees reveals a lot about their legitimacy. Avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own accounts. Be wary of those who claim they can get larger refunds than their competitors. Legitimate professionals charge flat fees or hourly rates, not contingency fees based on your refund amount.

Always discuss fees upfront and get them in writing. Before you agree to hire any kind of tax preparer, make sure to discuss what you can expect to pay. Some tax professionals may charge their clients based on the number of forms and schedules that must be filed with the return. Others may charge hourly, while some may do a combination of both.

Experience and Specialization Questions

Not all tax situations are created equal, and your preparer’s experience should match your needs. Ask specific questions about their background: How long have they been in practice? What types of clients do they typically serve? If you know your tax situation is not typical, make sure the professional you hire is someone who has completed returns similar to yours. Working with a tax preparer who is familiar with your line of work can be the difference between claiming all the deductions you’re eligible for and forfeiting money. If your taxes are more complicated than the average person’s — you’re self-employed, own a business or rental property, live in one state but work in another, have received an inheritance, or have worked abroad — your tax preparer should be well-versed in handling these specific situations.

For residents seeking qualified tax professionals wayne county and surrounding areas, it’s particularly important to find someone who understands both federal and state tax requirements, as well as local tax issues that may affect your specific situation.

Warning Signs of “Ghost” Preparers

One of the most dangerous types of tax scammers are “ghost” preparers. Be wary of anyone who won’t sign the tax return as the paid preparer and asks the taxpayer to sign and file the return themselves. The IRS requires tax preparers to sign returns and not doing so is a red flag and may signal fraud. These “ghost” preparers may be looking to make a quick profit and promise large refunds or charge fees based on the refund amount.

Ghost preparers set up shop around tax time in pop-up offices and pitch their services at community gathering places such as churches or on social media. They promise big refunds, often basing their fees on a percentage of the refund. To inflate what you get back from Uncle Sam — and what they get from you — they might invent income to falsely claim tax credits or fabricate deductions such as business, education or medical expenses.

Documentation and Process Questions

Legitimate tax professionals follow established processes and maintain proper documentation. Ask these critical questions: Will you provide me with a copy of my completed return? How do you handle my personal information and ensure its security? Trustworthy preparers will request proper documentation and ask questions to determine the client’s total income, deductions, tax credits and other relevant details. Do not hire a preparer who e-files a tax return using a pay stub instead of a Form W-2. This is against IRS e-file rules.

Always review your return carefully before signing it. Review the tax return before signing it. Be sure to ask questions if something is not clear or appears inaccurate. A reputable preparer will welcome your questions and take time to explain any items you don’t understand.

Ongoing Support and Representation

Tax problems don’t end when you file your return. Ask about ongoing support: Will you be available if I’m audited? Can you represent me before the IRS if issues arise? Consider whether the individual or firm will be around for months or years after filing the return to answer questions about the preparation of the tax return.

Companies like All County Tax Resolution understand this need for ongoing support. All County Tax Resolution started because too many hardworking people in Wayne County, Lackawanna County, Monroe County, Pike County, and Susquehanna County were getting crushed by tax problems they never saw coming. That’s why we focus on one thing: getting you out of tax debt as quickly and affordably as possible. They emphasize maintaining client relationships and providing comprehensive support throughout the resolution process.

Research and Verification

Don’t rely solely on the preparer’s word about their qualifications and reputation. Check the preparer’s history. Taxpayers can ask the local Better Business Bureau about the preparer. Filers should check with the Better Business Bureau to help research accountants and attorneys for possible complaints. You can also search the Department of Justice Tax Division’s database of injunctions and criminal prosecutions of tax preparers, as well as an alphabetical list of injunctions the Tax Division has obtained against preparers and promoters in the past 12 years.

Trust Your Instincts

Finally, trust your gut feeling about the professional you’re considering. The good ones will be eager to tell you that they tax controversy gives them an opportunity to help someone who is going through one of the most difficult times of their life. Unlike tax preparation or tax planning, tax controversy (especially tax debt relief) involves solving the gut wrenching pain of real people. Helping these people get rid of their tax debt is a noble pursuit, and anyone who overlooks that connection and does it for the money will not care enough about your case.

Taking time to ask these essential questions and verify credentials may seem tedious, but it’s far better than dealing with the aftermath of hiring a fraudulent preparer. Remember, taxpayers are ultimately responsible for all the information on their income tax return, regardless of who prepares the return. Choose wisely, ask the right questions, and protect yourself from tax scams that could cost you far more than professional fees.