Tags: incompetent | fraudulent | tax | preparers

CNBC: Watch Out for Incompetent, Fraudulent Tax Preparers

By    |   Monday, 03 February 2014 07:07 AM

Most U.S. tax preparers don't face any requirements for education, training and competence, so tread carefully if you decide to hire one.

Every state regulates its hairdressers, but only four — California, Oregon, Maryland and New York — regulate their tax preparers, CNBC reported.

Of course, "the consequences of a bad tax return are much more serious than a bad haircut," Chi Chi Wu, staff attorney at the National Consumer Law Center, told the news service.

Editor’s Note:
18.79% Annual Returns . . . for Life?

The center recently authored a report titled "Riddled Returns" that looked at mystery shopper testing of tax preparers conducted by government agencies and consumer groups over the years.

The report found that "widespread abuses" are being perpetrated by tax preparers, thanks to light regulation, according to CNBC. Those abuses are harmful both to the preparers' clients and the U.S. Treasury.

"We found incompetence and outright fraud," Wu explained. "And it wasn't just a few bad actors. We saw this over and over again."

The National Association of Tax Professionals, the country's biggest trade group of tax preparers, backs the idea of federal regulation.

"Oversight is not a bad thing," Cindy Hockenberry, who manages the association's Knowledge Center, told CNBC.

Stacy Johnson of MoneyTalksNews offers several tips for choosing a tax preparer.
  • Ask your friends or co-workers who they use.
  • Check their credentials.
  • Ask about experience, not just credentials and education.
  • Ask for referrals.
  • Talk to several preparers before you decide which one to use.
  • Ask if they are up to date on their continuing education.
  • Ask which professional organizations they belong to.
  • Compare prices.
"Bottom line? If you’re going to pay a pro, ask as many questions as you can about strategies to minimize your taxes and get enough sensible, specific, actionable advice to offset the additional cost," Johnson noted.

Editor’s Note: 18.79% Annual Returns . . . for Life?

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Most U.S. tax preparers don't face any requirements for education, training and competence, so tread carefully if you decide to hire one.
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2014-07-03
Monday, 03 February 2014 07:07 AM
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