Ask The Edd Lawyer-do You Have Any Advice To Taxpayers On Choosing A Tax Return Preparer?

By Robert S. Schriebman

All too frequently we see in our office the sad consequences brought about by victims of unethical tax return preparers. We see cases of stolen refund checks. Even worse, we see the EDD, FTB, and the IRS conduct concurrent audits as the result of the improper and illegal filing of fraudulent employment tax and income tax returns. You, as a taxpayer, are responsible for your choice of a tax return preparer. The EDD, FTB, and IRS are not very sympathetic when it comes to the abatement of penalties caused by the filing of bogus tax returns. We will talk more about these horrendous consequences when we discuss the problems that are caused by embezzlement of small defunct payroll tax companies, but for now I would like to give you some advice, courtesy of the IRS, for the selection of your next tax return preparer.

Before getting into specific IRS recommendations, I would like to give you my own personal word of caution. The best advertising is not the phone book, and it is not a web site. The best advertising has always been, and will remain, word of mouth. Before you hire anyone to handle any tax matter for you, including the preparation of your annual and quarterly tax returns, ask for references – and contact those references. YELP and similar sources might be great for your next dining out experience, but the best and safest avenue for you is to speak with the preparer’s clients. If your preparer refuses to give you the names of references, do not walk – run.

The IRS has issued a fact sheet offering taxpayers suggestions on how to select your next tax return preparer. The IRS is clamping down on bogus and unethical preparers, and there are new fines and penalties asserted against preparers who file phony returns or take positions on returns that cannot be substantially justified. However, this process is cumbersome, and it takes the IRS a long time to bring an unethical to justice. Believe me, very few unethical preparers feel the sting of the IRS.

Here are some tips offered by the IRS in their publication FS-2014-5 published on February 20, 2014:

1. Check to make sure that the return preparer has a Preparer Tax Identification Number (PTIN).
2. Check the history of the tax return preparer, including disciplinary actions, history with the Better Business Bureau, and appropriate agency information (such as the IRS Office of Enrollment for enrolled agents, the state board of accountancy for accountants, etc.).
3. Make sure thee preparer offers e-file, and ask him or her to file the return electronically.
4. Make sure the preparer will be available to be contacted, even after the return has been filed.
5. Give the preparer records and receipts. Taxpayers should make sure to provide Form W2 instead of the final pay stub.
6. Never sign a blank return.
7. Review the return before signing.
8. Make sure the preparer signs the return and includes his or her PTIN, and also that the preparer gives the taxpayer a copy of the return.
9. Report abusive tax return preparers to the IRS.

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An EDD lawyer, Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States.

As a trusted EDD attorney, Robert S. Schriebman has successfully dedicated more than 30 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House and the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure”, both published by Commerce Clearing House.