In a recent press release issued by the IRS, a Certified Public Accountant (CPA) was recently suspended from practicing before the IRS for 12 months. The Office of Professional Responsibility found the practitioner had provided false and misleading information in connection with the preparation of some of his client’s returns.
Robert A. Loeser, a CPA from Houston, Texas claimed false business expenses on his client’s returns in an effort to help inflate their tax refunds or to help lower their tax bills. In an elaborate scheme, the clients were forwarding funds from their businesses to two corporations Loeser controlled. The corporations then refunded money to the clients. The scheme made it appear the payments to Loeser’s corporations were normal business expenses, which they were not.
This scenario is just another example of “if it sounds too good to be true, it probably is.” Choosing a tax preparer you can trust is an important decision you must make for your own peace of mind. You need someone honest and trustworthy who has your best interests at heart. If a preparer tells you he or she can get you a larger refund than anyone else can, that should immediately raise a red flag in your mind.
You are ultimately responsible for your tax return as the taxpayer signing the 1040 and that is why it is important to have a knowledgeable tax preparer you trust.
The most important things to remember are to ask questions about their level of experience or ask if they have any credentials. Certified Public Accountants (CPAs) and Enrolled Agents (EAs) are required to take ongoing tax education credits. You might also ask friends or family who they use to prepare their income tax returns.
Check to see how long a preparer has been in their current location. Longevity at a location shows the preparer will be there for you if something should arise on your return and you need their assistance. You want to be comfortable in the knowledge they will be there for you, in the event you should ever need them.
Most importantly, avoid any tax preparer who bases the fee they charge on a percentage of the refund they are getting you. This and the promise of a large refund itself are two things that should raise red flags in your mind.
The IRS does not currently require any licensing or training for tax preparers. This will change next year, when preparers will be required to register with the government, pass a competency test and take continuing course to keep up on changing tax laws.
