During Tax Preparation Season, Be Careful!

It’s that time of the year again.  The IRS requires that everyone that earns above a certain amount must file a tax return.  The rule of thumb is that if you earn above $10,000, you need to file a tax return with the IRS; and a state tax return too.  But others may need to as well – those that have had taxes withheld from their paycheck beyond what they owe, for example.

Who Should You Hire To Do Your Taxes?

Some folks use commercial do-it-yourself tax return software.  This may be good for many people, as the software is elaborate enough to ask most questions on basic returns.  The pricing seems to be under $100 for federal and state on line software.  However, these packages assume that you understand what to do, have sufficient time and understanding of how to use the software, and that you are willing to trust that you are not missing anything.

There are many free services, such as the Volunteer Income Tax Assistance and the AARP but they require income guidelines and my simply offer advice and not follow through with completing your return and filing.

Hiring a Professional Tax Preparer

Some folks just want someone to hold their hand as they just don’t trust themselves to undertake the process, even with simple returns.  Many services are quite good, inexpensive, and thorough.  Consumers should be forewarned that many tax preparers are not trained or certified.  For complicated returns, returns with Schedule C income, real estate income, partnership income, or multiple capital gains or losses, we recommend retaining a C.P.A, a tax lawyer, or at the very least an “enrolled agent.”  All of the above have met minimum training, are licensed, and are required to be up to date on their craft.

Many tax preparers are not certified and are unregulated.  Many are excellent and are simply filling out a form that they have done many times and truly understand how to do so.  Others, however, have no training, or no updated training.  The National Consumer Law Center, located in Boston, undertook a study which found that 80% of respondents believed tax preparers should pass a standardized test before being allowed to charge for preparing tax returns.  But this is not the law.

So What Should You Look For in a Tax Preparer?

Some tax preparers undertake the educational program offered by the IRS in each season.   You can look up these preparers on the National Association of Tax Professionals database.  Nevertheless, you should still ask a potential tax preparer some basic questions:  Have you completed tax returns such as mine before?  How long have you been doing this?  How much will this cost?

Refund Warnings

Be careful when you are expecting a refund.  There are many schemes out there to steal all or part of your refund.

How Do I File an Official Complaint About My Tax Preparer?

The IRS has a form for filing a complaint against your tax preparer.  You can go to the IRS website to do so.

Consumer Attorney Neil Burns

The Law Office of Neil Burns does not undertake the preparation or filing of tax returns.  We do however represent consumers in personal injury and bankruptcy.  Taxes can be an important factor in both types of cases.  For example, in a bankruptcy, a common question is what, if any, tax refund is expected as that can be a factor in the trustee’s decision regarding exemptions; thus, careful planning is imperative.  In personal injury cases, damages for pain and suffering is not taxable, however, damages for lost income can be.  Again, having a lawyer review the personal injury release is imperative.

Call Attorney Neil Burns for a free consultation if you have been injured in an accident or if you have a personal bankruptcy.




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