BBB Tax Time Tips
It’s that time of year again. The IRS began accepting tax returns on January 30, and many are scurrying to file their taxes in the hopes of getting a refund as quickly as possible. BBB reminds consumers that not all tax preparers are created equal, so it’s important to check a preparer’s qualifications and track record before handing them your personal documents.
“Keep in mind, some tax preparation companies are open for only a few months every year, making it difficult to track the preparer down if you run into problems with your return”, said Mechele Agbayani Mills, President and CEO of BBB Serving Central East Texas. “Each year, consumers file complaints with BBB about delays in receiving refunds, some due to seasonal tax offices shutting down abruptly after tax season.”
Some tax preparers may offer loans that allow you to leave the preparer’s office with a check or debit card rather than wait for the IRS to mail your refund. BBB advises consumers to avoid these refund anticipation loans (RALs), which are very similar to payday loans and can carry interest rates from 50 to 500 percent. Some have hidden administrative fees. In most cases, RALs give consumers their refund only slightly faster than the IRS, which can deposit refunds in the bank in as few as 10 days. Also remember that if the refund is less than the loan, the taxpayer will have to repay the difference, along with any additional fees.
If you decide to hire a tax preparer, the BBB advises:
- Ask for referrals, but also check the preparer out with the BBB at www.bbb.orgor by calling 903-581-5704 before you hire anyone.
- Check credentials. Is the preparer a certified public accountant (CPA), a tax lawyer or an enrolled agent? Will the preparer sign your return and provide you with a copy? Does the preparer belong to a professional organization that requires members to adhere to a code of ethics?
- Be wary of promises. Until the preparer reviews your documents, there is no way to know whether you’ll get a refund or how big it will be.
- Check accessibility. You may need to contact your preparer after tax season is over. Will he or she be available? How can you contact them?
- Read the contract: Know what the service will cost, what it covers and whether the cost changes if you have a complicated return. Will the preparer represent you in case of an audit?
- Check your return: Before you sign the return, read it over to check for mistakes. Ask the preparer to explain anything you don’t understand.
Should you receive correspondence from someone claiming to be from the IRS, remember, the IRS doesn’t initiate contact with taxpayers by email and it won’t request personal or financial information or inform you of an audit that way. This is likely a form of identity theft, so forward the email to ic3.gov, report it to bbb.org, and then delete it from your computer.
For more information on tax-related issues, go to www.bbb.org. To report a fraud or scam, call the BBB Hotline: (903)581-8373.