Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
Shelley Osterloh ReportingMore then 60% of Americans filing an income tax return enlist the services of professional tax preparers, but sometimes they make mistakes that could cost you.
In most cases, using a professional tax preparers can save you time and money, but beware the red flags of preparers that may be fraudulent, unscrupulous or just plain incompetent. In those cases, it's the taxpayer, not the preparer, that's in trouble.
Lisa Kinser is a busy mother of two. When it came to filling out her tax return, she decided she needed help.
Lisa Kinser, Taxpayer: "I relied on someone who I thought was a professional who does this for a living, to be able to help me out and tell me what there was for me to take advantage of. And I was very unhappy with the result."
The tax preparer made several mistakes on Lisa's return. Her daughter's social security number was reported incorrectly, so Lisa received a letter from the IRS saying she owed over $7,000 in additional taxes. The preparer also told Lisa she didn't qualify for the lifetime learning credit, and she later learned she was eligible.
To avoid those kind so problems, the American Bar Association recommends you do some homework before selecting a tax preparer.
Dennis B. Drapkin, Chair, ABA Section of Taxation: "Tax payers, consumers should remember that they're ultimately responsible for what goes on their return so it's worth their while in picking a tax return preparers. They should ask, for example, how long a preparer has been in business? How many returns they've prepared? Whether the preparer has any special credentials? If possible references that can be checked out. It's worth the extra effort to be sure that you pick the right tax return preparer for you."
Here are more tips from the American Bar Association:
- Discuss fees before you start.
- Beware of scams that link fees to an unexpected tax refund.
- Review your return for accuracy and ask questions if you are unsure about any part.
- Keep a copy of your return and other paper work for at least three years.
- And lastly, remember that you, not the tax preparer are ultimately accountable for any mistakes on your return.
Another word of warning, avoid tax preparers that promise large refunds or schemes that sound too good to be true; in most cases, they are.
