443-221-8125
Select Page

Who’s a Tax Preparer?

by | Aug 26, 2020 | Business Taxes, IRS Laws, Personal Taxes

Did you know that it’s very easy to call yourself a “Tax Preparer”? There’s no qualifications, no one checks on you, you aren’t regulated by anyone. All you have to be able to do is fill in the information in the tax program, or fill in the forms. Anyone can do it. That doesn’t mean that anyone can do it correctly. There are a few states that regulate tax preparers, and Maryland is one of them. In these states, there are requirements to be able to charge a fee for preparing income tax returns. There has been proposed legislation in Capitol Hill to allow the IRS to regulate ALL paid tax preparers. Right now, the IRS does issue a PTIN (Preparer Tax Identification Number) to anyone who charges a fee for preparing tax returns. You can search the PTIN directory at https://irs.treasury.gov/rpo/rpo.jsf – PTIN’s have been issued to 256 people within 5 miles of my zip code.

Although it doesn’t always mean the person is legit or knows what they’re doing, here are a few things to look out for:

  • CPA’s, Enrolled Agents, and Attorneys are allowed to prepare tax returns and represent you before the IRS if there is an issue with your tax return. Annual Filing Season Program Participants and certain state regulated Tax Preparers can only prepare your return, but not represent you.
  • Your preparer should have a PTIN by their name on the tax return. Otherwise, you should not be paying for the tax return preparation. The IRS requires all paid tax preparers to have a PTIN – and renew it every year.
  • The Preparer’s Name field on the tax return should never say “Self-Prepared”. Tax preparers are required to sign every tax return they prepare.
  • The person preparing your tax returns for you should never base their fee on the amount of your refund. This is strictly against the CPA Code of Conduct, and is also against many state regulations.
  • Your tax preparer should file your returns electronically – unless you request to have your returns filed on paper. Any person who prepares more than 10 tax returns is required to file them electronically, unless the taxpayer specifically request a paper filing.