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5 Ways That A Tax Preparer Can Cheat You


You need to be careful when selecting a tax preparer, particularly as they will have access to data and sensitive information related to your business. There are many incredibly professional and worthwhile tax preparers registered, but those that are not so professional, can leave a bad impression for others.

Here are a few things to look out for when selecting a tax preparer:

  1. Have they asked you to direct deposit a refund into another account?

The bottom line is that direct depositing your refund into an account that doesn’t belong

to you, is strictly prohibited by the IRS and can land you in a whole heap of trouble. Some tax preparers may ask you to do this because it’s more convenient, or because they tell you that the refund will arrive quicker, so look out for tax preparers asking this of you and avoid them at all costs.

  1. Are their fees based upon a percentage of your refund?

If the answer is yes, then there’s a strong possibility that they are engaging or fraud or some other activity that is likely to creep up and bite you on the butt. Their fees can be based upon several factors but basing them on a percentage of the refund amount is not permissible.

  1. Have they promised you a refund by a certain date?

The IRS clearly state that there are no guarantees where the time frame of refunds are concerned, and so there is no valid reason why a tax preparer would tell you that your refund will arrive by a certain date, and if they do so, then they should probably not be trusted.

  1. Did your tax preparer guarantee your refund without even seeing your documents?

No tax preparer, no matter how good they are at their job, or how qualified they are, can possibly know whether you are entitled to a refund until they run your numbers through a system. Any tax professional who tells you this should be avoided at all costs.

  1. Has your tax preparer implied that they are endorsed by the IRS?

If yes, then this should set off huge warning bells. The IRS never endorse any individual tax preparer, although they do recognize credentials such as those belonging to CPA’s, attorneys, Enrolled Agents and Actuaries. Implying to customers that they are endorsed by the IRS is dangerous ground for them, so be cautious of such claims and don’t be afraid to do your research upon them before engaging with them.

The biggest word of advice that can be given when selecting a tax preparer and trying to plan for your taxes, is to focus on getting your taxes done right, rather than simply thinking about getting a refund.

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