Your neighbor tells you “a cousin does taxes cheap in his living room.” Another passes you the contact of someone who “gets big refunds.” During tax season, offers arrive on their own —and the difference between a good preparer and a bad one isn’t measured in dollars: it’s measured in what could happen to your return.
Choosing a preparer isn’t like choosing a hairstylist. You’re going to hand over your Social Security number, your income, your marital status, and your kids’ data. If something goes wrong, you’re the one responsible before the IRS, not them. That’s why it’s worth investing ten minutes in choosing well.
Rule 1: they must have a valid PTIN
The first filter is non-negotiable: every paid preparer must have a valid PTIN (Preparer Tax Identification Number), the identification number the IRS assigns to those who prepare returns for money. It’s free to verify: ask for it; check the number before signing anything.
If someone does your return in exchange for money and has no PTIN, you’re dealing with someone who operates outside the system. A PTIN doesn’t guarantee they’re brilliant, but it’s the minimum identity card: without it, there’s nothing more to discuss.
Rule 2: they must SIGN your return
This is where professionals part from ghosts. A legitimate preparer signs your return, with their name and PTIN, and that signature appears on the return sent to the IRS. It’s their way of saying “I prepared this and I’m responsible.”
The ghost preparer does the opposite: they prepare your return, charge you, don’t sign it. When the return has errors or problems, the IRS has no record of them, but they have your name on the taxpayer’s signature. The ghost disappears and you’re left holding the problem. If a preparer refuses to sign, stand up and leave.
Rule 3: verify their real credentials
Not all preparers are equal, and the difference has a name: the level of representation before the IRS. The main types are:
- Enrolled Agents (EA): they passed federal tax exams and have unlimited representation rights before the IRS. If you’re audited, they can speak for you.
- Certified Public Accountants (CPA) and attorneys: they also have unlimited representation, although not all specialize in individual taxes.
- Annual Filing Season Program participants: they completed voluntary education hours with the IRS each year; they have limited representation (they can speak for you in certain cases for clients they prepared).
- Preparers without credentials: they can prepare and sign returns, but they cannot represent you before the IRS in an audit.
The IRS keeps a public directory of preparers with credentials and qualifications, where you can search by zip code and verify that the person serving you is who they claim to be. Do it before handing over your documents, not after.
Rule 4: fees never depend on the refund
A classic red flag: the preparer who charges a percentage of the refund, or guarantees you a big amount before seeing your papers. Professional fees are based on the complexity of the work —how many forms, how much income, what deductions—, never on the size of the refund.
Think about it: if their pay grows when your refund grows, they have a direct incentive to inflate your return. And when the IRS detects the inflation, the one who signed the return as the taxpayer was you. Ask the price up front, ask that it be for the work, and distrust anyone who turns your refund into their commission.
Rule 5: your refund lands in YOUR account, not theirs
Another red flag: the preparer who asks for the refund to be deposited into their account to deduct their fees, or hands you the refund in cash with a mysterious discount. Your refund is yours: it must land in your bank account or at your address, with no middlemen.
Don’t accept refund advances in exchange for a fee either: those financial products are very expensive loans disguised as convenience. File, wait the IRS’s normal times, and receive your full money.
Rule 6: they must give you a copy of everything and let you review
Before filing the return, a good preparer shows it to you complete, explains what it is, and hands you a copy of everything: the return, the forms, and the supporting documents. Check the numbers, ask about what you don’t understand, and never sign a blank return or one you haven’t read.
And if something goes wrong with a preparer, the IRS has a process for filing formal complaints against paid preparers who act improperly. It’s not just to vent: it helps take those who scam others off the market.
What to do today, in order
- Ask the preparer for their PTIN and verify it before handing over your documents.
- Look them up in the IRS public directory to confirm their credentials.
- Ask the price up front and confirm it doesn’t depend on the refund.
- Review your complete return before signing and demand a copy of everything.
Official sources
This content is informational and is not tax advice. For your particular case, consult the official sources or an authorized professional.
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