People Sound Off To BBB With Tax Preparer Complaints

Few things are as certain as death and taxes, but it’s also true that few things are as scary. That’s why more than half of the 120 million American taxpayers enlist the help of tax preparers every year. However, many people end up being held responsible when their tax preparers make mistakes or errors on their returns. This can mean fees and fines adding up to thousands of dollars owed to Uncle Sam. According to a Better Business Bureau analysis, nearly one-third (32.5 percent) of complaints against tax preparation companies allege preparers made tax return errors or mistakes.

While mistakes and errors made up the most common complaint category against tax preparers, 19.5 percent of complaints allege tax preparers were simply unresponsive. Typically, tax preparers didn’t return repeated calls or attempts by complainants to get assistance, answers to questions or copies of their tax information. Many complainants noted they were frantic as they faced filing deadlines or audits and weren’t receiving any help from their tax preparers.
Disputes over billing accounted for 19 percent of BBB complaints. Typically, people were shocked when they received high bills for having taxes prepared or felt they didn’t receive the level of service paid for.

Almost 7 percent of complainants say the tax preparation companies were rude and 6 percent say they didn’t receive their refunds. In addition, 6.3 percent of complainants allege the tax preparers never filed their tax returns at all.

John North, BBB President and CEO, says, "If you’re looking for trustworthy help filing your taxes, don’t wait until the last minute. You need to take your time, shop around and find a preparer who is both qualified and has a strong track record of providing customer service. Some people who rushed through the process in 2007 are still dealing with the mess their tax preparers made as they head into the 2008 tax season."

From 2005-2007, the Internal Revenue Service opened nearly 700 tax return preparer investigations. And, in April 2006, the Government Accountability Office issued findings from a limited study of commercial tax preparation chains in major metropolitan areas, noting all the returns completed in those offices were wrong in one way or another. The report cited mistakes, such as not reporting business income, failing to take the most advantageous education tax benefit, failing to itemize deductions and, in some cases, even failing to claim available deductions.

Your BBB wants you to know and understand when the IRS detects a false return, you – not the tax preparer – must pay any additional taxes, as well as any other associated interest, fees and penalties. In the end, you’re responsible for all information submitted to the IRS.

Many tax preparers provide quality services to their clients, but your BBB encourages you to use the same caution in selecting tax preparation help you’d use in selecting other professional services, such as those provided by doctors or lawyers. BBB complaint data confirms the need for you to be careful and choosy. Your BBB offers the following advice when searching for help with taxes:

Ask around. Get referrals from friends and family and get reliability reports on tax preparation services free-of-charge at www.bbb.org or by calling (937) 222-5825 or (800) 776-5301.

Look for credentials. Ideally, tax preparers should either be certified public accountants, tax attorneys or enrolled agents. All three can represent taxpayers before the IRS in all matters, including audits. Also, find out if the preparer is affiliated with a professional organization that holds its members to a code of ethics.

Don’t fall for the promise of a big refund. Be wary of a tax preparation service promising larger refunds than the competition and avoid tax preparers who base their fees on percentages of the refund amounts.

Think about accessibility. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors or in case of an audit, you need to be able to contact your tax preparer throughout the year.

Read the contract and know what you’re paying for. You must read tax preparation service contracts closely to ensure you understand issues, such as how much the service is going to cost, how the cost will be affected if preparation is more complicated and time consuming than expected and whether the tax preparer will represent you in case of an audit.