The IRS reports millions of mistakes in tax returns every year because of individuals filing on their own or sometimes using the wrong expert. That is exactly why hiring a tax preparer could be one of your best financial choices.
At The Fino Partners, we have assisted numerous U.S companies and people that ask us "How to Hire a Tax Preparer?" The truth is—finding the right one isn’t just about saving money; it’s about avoiding costly mistakes. But just as there are great professionals, there are also people who may not have your best interests in mind.
In this article, we will discuss 5 red flags to avoid when hiring a tax preparer to stay away from falling into typical traps. So if you are looking forward to hiring tax preparers near me or thinking to hire remote tax preparer from India, you need to keep these warning signs in mind before hiring.
Avoid These 5 Red Flags When Choosing a Tax Preparer
Below are 5 red flags to help you understand what to avoid when hiring a tax preparer:
1. Huge Refund Promises
Without understanding your finances a tax preparer who promises you a huge refund without looking at your documents is a red flag. The IRS warns taxpayers of this particular tactic, which it links with fraud.
A reputable professional is going to take time to discuss your income, deductions, credits and tax record prior to giving an estimate. Anyone who makes bold promises without data is not trustworthy.
Tip: Consult your tax professional how they came to their estimate of refunds. If they don't explain, look elsewhere.
2. Lack of Proper Credentials or IRS PTIN
In the U.S, anybody preparing taxes for a fee should have a valid Preparer Tax Identification Number (PTIN) coming from the IRS. The best professionals also have credentials like-
- CPA (Certified Public Accountant) for advanced tax and accounting.
- EA (Enrolled Agent) - licensed through the IRS directly.
- Tax Attorney - Useful for legal or complicated tax problems.
That is a big warning sign if the person you're considering doesn't have a PTIN or won't produce evidence of qualifications.
Tip: Verify a preparer's credentials in the IRS Directory of Federal Tax Return Preparers.
3. No Written Agreement or Fee Structure
A professional tax preparer will always document their services and fees upfront. Watch out for those who :
- Fees differ by the size of your refund.
- Refuse to write down their rates.
- Charge hidden fees after your return is filed.
The IRS recommends against working with someone who bases their fee on your refund amount. This encourages fraud.
Tip: Always sign an upfront written agreement which says what services are included and also what the price is and who's liable in case any mistakes happen.
4. Reluctant to Sign the Return or Provide their PTIN
By law, tax preparers must sign your return and include their PTIN. If they decline or even attempt to make you file it yourself the moment they have prepared it, that is a red flag.
This behavior generally means the preparer doesn't want accountability for their work, so you're legally responsible for errors or fraud.
Tip: Never ever sign a blank tax return. Be sure your preparer signs and also gives their PTIN before you file.
5. Poor Communication and Lack of Transparency
Many taxes entail follow-up questions, IRS notices, or clarifications. If your tax preparer is difficult to contact, will not return calls, or did not describe the way they prepared your return, you can have huge issues later.
Transparency is key. A great preparer will explain deductions, credits and techniques in simple language so you know what is happening with your money.
Tip: Notice the way the preparer communicates during your first consultation. If they come across as rushed, dismissive or vague, move on.
Why Avoiding These Red Flags is Important
Hiring the wrong tax preparer could result in :
- IRS penalties and audits - You owe what is filed under your name.
- Delayed refunds - Errors and inconsistencies can slow down the refund.
- Financial loss - Fraudulent preparers steal refunds or charge very high fees.
- Stress and wasted time - Fixing a mistake later is more costly than getting it right the very first time around.
Knowing what to avoid protects you, your business and your finances.
How To Protect Yourself When Hiring a Tax Preparer
Below are some ways to protect yourself when hiring a tax preparer-
- Do your research- See reviews on Google, Yelp or LinkedIn.
- Check credentials- Use the IRS preparer directory to confirm their PTIN & certifications.
- Ask questions- Ask how they handle compliance, IRS audits or electronic filing.
- Get a written agreement- Make sure fees and responsibilities are clear.
- Work with trusted partners- The Fino Partners work transparently and assist clients in every step of the way.
Taxes are too important to leave in the wrong hands. If you are searching for hiring tax preparers near me, then you can get the exact same benefit from a remote tax preparer from India, but it’s better if you know these 5 red flags to ward off mistakes, fraud and unnecessary stress.
Related Resources
- Top Questions to Ask Before You Hire a Tax Preparer
- Online Tax Preparer vs. Local Accountant: Which One Should You Choose?
- Why You Should Hire a Tax Preparer : Benefits, Costs & What to Expect
We have assisted hundreds of U.S small business owners and individuals secure the right financial support at The Fino Partners. Remember- a good tax preparer does much more than file papers, they act as your financial advisor.
So the next time you think "How to Hire a Tax Preparer" think of these warning signs. They might save you several thousand dollars and hours of stress.
