Q: What should taxpayers consider when searching for outside assistance with their income tax returns?
A: First, all taxpayers need to understand they ultimately are responsible and accountable for every line of information provided on their returns, even if a professional was hired to help prepare their tax forms. That's why it's essential to find a reputable preparer. Referrals often are the best way to find a qualified and trustworthy tax professional. Suggested tips when choosing a tax preparer include avoiding those who claim they can obtain significantly larger refunds than other preparers as well as those who base their fee on a percentage of the tax refund. Always carefully review and ask any questions about the information on the tax return before signing it. Never sign a blank tax form. Also consider whether the tax preparer or business will be accessible in the future to answer questions on the tax return months and even years after it has been filed.
Q: Do tax preparers need to be certified by the IRS?
A: Currently, the IRS does not have standard credentials required for all tax preparers to meet. In fact, taxpayers may choose from any number of professionals to prepare their tax return, from certified public accountants, to tax attorneys, investment advisers and financial planners. As chairman of the Senate Finance Committee, which bears oversight authority over the Internal Revenue Service, I keep a close eye on matters affecting American taxpayers. In the late '90s, I successfully led the effort to enact reforms at the IRS that would improve customer service and upgrade outdated technology. Recently I've caught wind of an abusive tax preparation scheme involving rogue tax preparers that may be taking some folks for a ride. With the click of a mouse, it appears some aggressive marketers are offering to e-file tax returns on the spot and offer what's called a "refund anticipation loan" to pay for merchandise immediately. But problems may arise when poorly prepared returns trigger follow-up from the IRS. Taxpayers need to remember the Golden Rule for consumers: If it sounds too good to be true, it probably is. In an effort to protect taxpayers and the reputation of conscientious, competent tax preparers, I'm working on legislation that would require all tax preparers to register with the IRS, pass a competency exam and fulfill continuing education requirements. More than 133 million tax returns will be filed with the IRS this year. And more than half of Americans now use a tax preparer. Although I agree with Iowans who complain the tax code is just too complicated, I want to make sure the system we do have protects hardworking taxpayers if they choose to hire a tax preparer to help them navigate the federal tax code. Taxpayers who suspect an abusive tax return preparer ought to report the information to the nearest IRS field office. Or contact the IRS by phone at (800