We all know that every CPA, Accountant, Enrolled Agent, Tax Preparer and Lawyer charges different fees for preparing a tax return. Some will charge by the form, others by the hour, some are based on the complexity of the return, while others charge by the complexity of the tax payer. Some returns will cost more in different regions of the country, while you can find huge differences within one locality. Someone who’s working on their own, with no employees or office space, may charge less than someone a mile away with 3 offices and 4 employees. One professional may have children in college or a high-maintenance life-style, while another may just need something to do in their spare time. There are a lot of factors that make up pricing for tax returns, but one thing that should not determine the tax prep fees is the amount of the refund. In most states, it is unethical for paid tax preparers to base your fee for the original return on the amount of your refund. Amended returns and returns under review or audit by the IRS are not subject to this standard, but if a preparer is filing the original return for you, they should not be basing their fee on the amount of the refund you will receive or tax that you owe.
Some people may wonder why this is such a taboo way to determine the tax prep fee, since it seems really easy. Typically (but not always), when someone bases their fee on the amount of your refund they are going to report something fraudulent on the return. It’s to their benefit to get you a higher (although maybe not deserved) refund. And although it might look like it’s to your benefit, you are ultimately responsible for the information being reported on the return. A fraudulent return carried hefty penalties, and it’s not just monetary penalties.
Although you may not always like how much it costs to have your taxes prepared professionally, please don’t work with someone who is trying to charge a percentage of your refund. I wouldn’t want to read about you in my journals.
All My Best,
Dawn
Recent Comments