How to Choose Tax Professionals (Not Doughnuts)
Choose (Not Doughnuts) Tax Professionals, IRS Tax Attorney (Naperville IL)
Because it’s the beginning of the year, I want to discuss how to choose the right tax professionals to help you. We see advertisements constantly with companies that promise to get you the largest refund possible. Well, please be careful about that.
This is why for the most part, your tax return has only one correct final number. That includes your refund as well. Companies that promise to get you a larger refund than others often consider using unlawful or illegal claims on your tax return. And that could get you into big trouble because ultimately you are responsible for your tax return.
Important Recommendation
We recommend using a tax return preparer that is listed on the special page at IRS.gov. Go to the Choosing a Tax Professional page. These people have been licensed and authorized by the IRS. They tend to be much more professional, and certainly more cautious than those companies promising “the biggest refund”.
Things to watch out for:
- There are a few companies that will provide you with a copy of your tax return but do not provide a copy of the return as filed.
- When they file it electronically, some companies prepare what they call a “ghost” tax return. What that means is that they provide you with one tax return document, but file something completely different with the IRS. This enables that company to claim a larger refund and keep the difference of the refund that they showed you.
- Another example is a tax return preparer who provides you with a copy of your tax return, but on page 2 (in the signature area) it does not include their name. Instead, it includes the words “Self-Prepared”. Now, we have seen this hundreds of times every year. This is an unlicensed tax return preparer. Avoid working with that company because that person cannot be held responsible for your tax return. The reason why is they are not identified on your tax return as the preparer.
- Also, watch out for any company that does not ask for proof of your dependents or business income and expenses.
- The preparer should request the correct support documentation for other items on your tax return (for example: for a small business, a rental property, or even self-employed income). Often these companies are not very thorough in preparing your tax return. This unfortunately could cause you to be subject to an IRS audit.
Just be careful in choosing your tax return professional.
What About Tax Resolution Companies?
Finally, we give a similar warning to anyone looking for help to resolve their tax problems or represent them before the IRS or state government. The same advice holds: You want to find a company registered or associated with one of the tax professional organizations.
The professionals within these companies often attend annual training. They usually maintain a great reputation for those seeking tax resolution.
Note: Earlier in the year, we suggest that as you speak with your tax resolution professional, that you include preparing last year’s tax return as part of the overall resolution. This is because the IRS will require all missing tax returns to be prepared before they allow any payment resolution or settlement.
But also, this creates a better settlement or resolution opportunity for you. You want any settlement to include your liability from this last year, right? We suggest filing last year’s tax return as early as possible. This way, the IRS can assess and include that tax within your overall resolution. It’s a better deal for you.
How to Clear the Fog
Finally, these are the three factors that we suggest in choosing your tax resolution professional. Here’s a hint. It is not the lowest-priced company. There is an old saying that you get what you pay for. In this case, it is often true. This is what you should look for.
One. Find a company that has a very good reputation.
Compared to budget firms, companies with great reputations tend to care more about their customer service and their overall customer experience. In doing so, they tend to be the companies with the most knowledge and best internal processes. This ensures that your results and experience are both great.
Two. Make certain to choose a professional with whom you can relate to and communicate with.
One of the biggest complaints towards tax resolution professionals is that they rarely communicate with their clients. Also, some of those professionals seemed insincere about their client’s problems. We hear that other firms never spoke plainly; in a way the customer could understand. Make sure they have a process to answer your phone calls, return your phone messages, and answer your emails within the same day.
Three. Prices depend on the level of service and professional competency you might receive.
Firms’ pricing will vary. It is a mistake to choose the “lowest bidder”. We suggest that you find a company willing to track and be accountable for their time. That means they show you their work, and they show you the time that they spent.
Find a company willing to give you a payment plan for your overall expenses. These companies tend to try harder to make your tax resolution project affordable to you.