With the continued increase of electronic filing of tax returns, it’s also become increasingly troublesome that more and more people are losing their identity due to a lack of increased security as it relates to the submission of taxes filed online. Although Congress is working towards reviewing what’s been going on at an alarmingly high rate, one of the major causes of this has been what’s termed as the “Phantom Preparer.” Recently the IRS has made great strides in attempting to regulate tax preparers with what’s called a Preparer Taxpayer Identification Number or PTIN. This PTIN designation is an avenue for which financially compensated preparers are checked against their social security number for potential fraud in filing prior false returns, are required to have continuing education on an annual basis, as well as adequate testing to help prevent potential errors that are so common on individual returns.
Every year fly-by-night shops are set-up across the country and on-line, in order to help with the onset of preparing people’s tax returns, however often times the shops disappear the day after the final official tax filing in April, only to have those people who have been misled to be fending for themselves when the letters start pouring in. An issue that most people fail to realize, is that if it’s a recognizable name such as those who appear on television and radio ads, feel that they can trust them, are just as susceptible because often times these are franchises that they are walking into and don’t have direct supervision from established tax professionals which offer any type of quality assurance standards in making sure that the employees or often times independent contractors are maintaining the proper code of conduct for preparations.
With more than 80% of individual tax returns filed annually via an electronic source, it’s also been an issue for IT security for a number of these small tax preparation businesses to contend with. Questions arise as to how safe your information is, and how trusted can your tax return preparer be. Because of these potential issues, below is a list of 5 important questions you should always ask yourself before turning over your information to a tax return preparer:
1. Do they have a PTIN? Check with the IRS for verification and ask for a copy of the registration information.
2. Determine if that tax location was there 6 months ago and if not, do you have any recourse as to who the owner of the lease is, should you have problems after April 15th.
3. How often are you checking your credit reports? All 3 agencies, Experian – Transunion – Equifax, offer a joint subscription service directly on their web sites for $29.95 per month currently.
4. Do you have a back-up plan in case you go to a tax preparer who no longer exists? Always have a resource that you can go to in helping assist you in determining your best course of action should tax liability issues arise.
About Our Show Advisor: Dwayne Briscoe is the founder and owner of Bookkeeping-Results, LLC. Dwayne began his company in January 2007, based on the foundation to educate small business owners and bookkeepers who use QuickBooks®. Working as a full-charge bookkeeper and trainer in a variety of industries for over 15+ years, he is a certified Pro Advisor with 5 certifications, including Enterprise Solutions and Point of Sale. He is also an instructor at Brazosport College in Lake Jackson, where he teaches basic accounting, QuickBooks®, and basic payroll, along with hosting his own private classes.
Bookkeeping-Results, LLC has focused more on quality and not quantity for their clients, by paying attention to the details. Through regular continuing education participation, as well as exploring additional ways of “thinking outside of the box” to help expand people’s knowledge of their own financial well being, it’s important to focus on not only saving the client money but also making the client money.