How to choose a preparer, avoid scams and costly tax refund loans
It’s tax time again. Before you rush out and get your taxes done, the Better Business Bureau (BBB) advises you to check your tax preparer’s BBB Business Review and be aware of pitfalls that trip up taxpayers every year.
BBB Business Reviews are a great way to check out any business, including accountants and other tax professionals. The reviews list any complaints filed against a business in the last three years. They rate companies A+ to F based on 16 factors, including how long they’ve been in business and how they respond to complaints.
Some tax preparation companies are open for only a few months every year, and it can be hard to track the preparer down if you run into problems with your return. Consumers already have filed complaints with the BBB this year about delays in getting refunds. Some tax preparation offices have shut down abruptly, prompting complaints.
Not all tax preparers are created equal, so it’s important to check a preparer’s qualifications.
Tax preparers may offer loans that allow you to leave the preparer’s office with a cheque or debit card rather than wait for the Canada Revenue Agency (CRA) to mail your refund. The BBB advises consumers to look into these loans to make sure there aren’t hidden interest fees, (some have hidden administrative fees) or that you are not paying a large amount to get the cheque up front. If a preparer makes a mistake in calculating your refund, borrowers may have to pay fines and fees, too.
H&R Block recently issued warnings about online schemes that can steal taxpayers’ identities. Scam emails may say that there’s an issue with a refund, that the taxpayer is being audited or that there’s a delay in processing the tax return. Links in the emails usually go to a scammer’s website, which asks victims to enter personal information, bank account or credit card information. The site may automatically install viruses or other malicious software on victims’ computers.
H&R Block doesn’t initiate contact with taxpayers by email, and it won’t request personal or financial information or inform you of an audit that way. BBB says taxpayers should suspect identity fraud if they receive a letter from the a tax company saying that more than one tax return was filed for them or if the letter states that you received wages from an employer you don’t know.
If you decide to hire a tax preparer, the BBB advises that you:
- Ask for referrals from friends, but check the preparer out with the BBB before you hire anyone at www.calgary.bbb.org.
- Check credentials. Is the preparer a certified accountant, a tax lawyer or an enrolled agent? Will the preparer sign your return and provide you with a copy? Does the preparer belong to a professional organization that requires members to adhere to a code of ethics?
- Be wary of promises. Until the preparer knows your situation, there is no way to know whether you’ll get a refund or how big it will be.
- Check accessibility. You may need to contact your preparer after tax season is over. Will he or she be available?
- Read the contract: Know what the service will cost, what it covers and whether the cost changes if you have a complicated return. Will the preparer represent you in case of an audit?