Monday, October 13, 2008

Kay Robinson: BBB Report

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Sunday, March 16, 2008
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Check Out Tax Preparer Before Trusting Him With Your Taxes
According to a Better Business Bureau analysis, nearly one-third (32.5 percent) of complaints against tax preparation companies allege that the preparer made an error or mistake in the tax return, often requiring the consumer to pay fines or added fees to rectify the problem.

Few things are as certain as death and taxes, but it's also true that few things are as scary. That's why more than half of the 120 million American taxpayers enlist the help of a tax preparer every year. However, many consumers end up being held responsible when their tax preparer makes mistakes or errors on their return, and this can mean fees and fines adding up to thousands of dollars.

Disputes over billing accounted for 19 percent of complaints to the BBB. Typically, consumers were shocked when they received a high bill for having their taxes prepared or felt that they did not receive the level of service they paid for.

Almost 7 percent of complainants said the tax preparation company was rude, and 6 percent of complainants said they didn't receive their refund. Unfortunately, and perhaps most shocking, 6.3 percent of complainants allege that the tax preparer never filed their tax return.

The BBB wants consumers to know and understand that when the IRS detects a false return, the taxpayer - not the tax preparer - must pay any additional taxes, as well as any other associated interest, fees and penalties. In the end, the taxpayer is responsible for all information submitted to the IRS.

Many tax preparers provide quality services to their clients, but the BBB encourages consumers to use the same caution in selecting tax preparation help that they would use in selecting other professional services, such as those provided by doctors or lawyers. And BBB complaint data bears out the need for consumers to be careful and choosy.

The bureau offers some advice when searching for help with taxes:

  • Ask around. Get referrals from friends and family on who they use, and check the BBB Reliability Report on tax preparation services free at www.bbb.org.

  • Look for credentials. Ideally, tax preparers should be a certified public accountant, a tax attorney or an enrolled agent. All three can represent taxpayers before the IRS in all matters, including an audit. Also, find out if the preparer is affiliated with a professional organization that holds its members to a code of ethics.

  • Don't fall for the promise of a big refund. Be wary of any tax preparation service that promises larger refunds than the competition and avoid any tax preparers who base their fee on a percentage of the amount of the refund.

  • Think about accessibility. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors, or in case of an audit, consumers need to be able to contact their tax preparer throughout the year.

  • Read the contract and know what you're paying for. Consumers must read tax preparation service contracts closely to ensure they understand issues such as, how much it is going to cost for the service, how the cost will be affected if preparation is more complicated and time consuming than expected, and whether the tax preparer will represent the consumer in case of an audit.

  • Kay Robinson is president of the Better Business Bureau of Central East Texas, serving 19 East Texas counties. To contact the BBB in Tyler, call 903-581-5704, and in Longview, call 903-757-3611 or 800-443-0131, or visit the Web site at www.easttexas.bbb.org. The organization can be e-mailed at info@tyler.bbb.org.


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