Having a pro do your taxes? Don't be scammed

Herb Weisbaum • Profile • E-mail

A new report from the Council of Better Business Bureaus shows a large percentage of customers are unhappy with the tax preparer they hired last filing season.

“Some of them are still dealing with the mess their tax preparer made as they head into the 2008 tax season,” says the bureau’s Alison Preszler.

The BBB says nearly one-third of the complaints allege the preparer made a mistake, that in many cases resulted in fines or added fees.

About 20 percent of the complaints deal with preparers who were unresponsive. They ignored repeated calls or e-mails from the customer to get assistance, a question answered, or copies of their tax information.

“When people don’t hear back from their tax preparer as soon as they want, they get anxious and nervous,” Preszler says. “They want to know that their taxes are being taken care of, and in a timely manner.”

Robert and Debra Jefferies of Gaffney, S.C., told the BBB their preparation firm dropped the ball when the state audited their back income tax returns.

Using a tax preparer A paid preparer is required by law to sign the return and fill in the preparer areas of the form. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. Review the completed return to ensure all the information is correct. Review and ensure you understand the entries and are comfortable with the accuracy of the return before you sign. Never sign a blank return, and never sign in pencil. On its website, the IRS posts a list of common scams, schemes and claims that have been determined by the courts to be frivolous. These include the argument that filing a tax return is voluntary and the government cannot require you to pay an income tax. If a preparer uses one of these bogus claims for your return, you could be slapped with a $5,000 fine for filing a frivolous return. Source: IRS

The state needed information from the tax preparer, but the company never responded. Mrs. Jefferies said she was told repeatedly, “we’re taking care of it.” But it wasn’t taken care of – and for more than a year now the state has garnished her husband’s paycheck. “To this day, they’ve never done anything,” Mrs. Jefferies says. “We weren’t treated fairly.”

Billing disputes are another big problem area. They account for 19 percent of the total complaints filed with the BBB about tax preparers. Most of these billing complaints are from people who say they didn’t know it was going to be so expensive. So it’s very important to find out up front how the service bills.

Here’s a real shocker: About 6 percent of the people who complained to the Better Business Bureau say the tax preparer never filed their return.

Remember: it’s still your return
You may have someone prepare it, but in the end you are ultimately responsible for what’s on your tax return. “You are signing the return under penalty of perjury, so you have an interest in it being correct,” notes IRS spokesman Eric Smith.

Anyone can make an honest mistake, but there are dishonest preparers who deliberately break the rules to deliver a bigger refund than legally allowed. They overstate deductions or make up bogus write-offs in order to inflate your refund.

In January, the U.S. Department of Justice sued a Dallas-area company it accused of claiming bogus fuel tax credits on the returns it prepared. The complaint cites a tax return for one customer that claimed he bought 53,454 gallons of gasoline for work-related purposes. For this deduction to be accurate, the lawsuit says, the taxpayer would have spent more than five times his total income on gasoline.

About 350 tax preparers have been sentenced to prison during the past three years. Many more have been barred from preparing returns or promoting fraudulent tax schemes.

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