The Arizona Department of Revenue (ADOR) is reminding taxpayers to exercise due diligence in the selection of tax preparers. The IRS indicates roughly 60 percent of tax filers use tax preparation services.
While the majority of tax preparers are professional and qualified, there are cases where some have attempted to submit fraudulent returns or promised larger tax refunds by making unsubstantiated changes to the tax return.
- Ensure the tax preparer provides you with a copy of the entire return.
- Insist the preparer provide a copy of the schedules if there are itemized deductions or credits.
- Ask the preparer to explain the return, including deductions, credits and wages claimed.
- Review the tax return before submitting to ensure numbers are correct and schedules add up to source documents provided to the tax preparer.
- Know preparers are prohibited from charging a percentage of a taxpayer’s refund as their fee.
Some key questions to ask
- What kind of formal training does the preparer have and how current is the training? Where did the preparer receive the training?
- What professional licenses or designations does the preparer hold? These include: accredited tax preparer (ATP), accredited tax advisor (ATA), certified public accountant (CPA), enrolled agent (EA) or registered accounting practitioner (RAP).
- Does the preparer belong to any professional organizations? How long has the preparer been doing tax returns?
- Does the preparer offer e-file services? Is the preparer available year-round?
- Will the preparer explain how the return was prepared in the event of an examination by ADOR or the IRS?
- Did the preparer explain charges for services in advance?
- Does the preparer provide copies of complete returns to clients?
In 2018, ADOR’s Criminal Investigation Unit (CIU) stopped more than $1.8 million from nearly 2,000 fraudulent returns submitted by tax preparers. The Department of Revenue continues to introduce new counter-measures to confirm if a tax return is being filed by the real taxpayer and that claimed deductions and credits are legitimate.
ADOR recommends taxpayers with questions contact the department’s Identity Theft Call Center at: 602-716-6300, toll free: 1-800-352-4090 or: azdor.gov/individual-income-tax-information/identity-theft.