Check qualifications and be sure you understand your return before signing
In 2020, 46% of Americans used tax preparation software to file their returns, while 27% used an in-person, full-service tax preparer, according to a
national survey by College Investor, a personal finance website.
With the tax season officially opening January 23, many South Carolina taxpayers will be searching for help to prepare their tax returns. If you're planning to use a tax preparer this tax season, the South Carolina Department of Revenue (SCDOR) reminds you to do your homework before handing over your most sensitive tax information.
While most tax preparers are honest and provide great service, both the SCDOR and the IRS regularly prosecute unscrupulous tax preparers.
In 2022, the IRS identified over $5.7 billion in tax fraud and prosecuted over 1,800 individuals for financial crimes, including many dishonest tax preparers. Return preparer fraud has regularly been listed as one of the
IRS's Dirty Dozen Tax Scams.
IRS offers the following tips to help you when choosing the right tax preparer.
Avoid tax preparers who:
- Base their fee on a percentage of your refund.
- Claim they can obtain larger refunds than other tax preparers.
- Refuse to sign a return they prepare.
- Ask you to sign a blank tax return.
What to consider in picking a tax preparer:
- Check their qualifications. All preparers must have a Preparer Tax Identification Number (PTIN). You can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to help find a preparer.
- Ask about the preparer's fees. Do not give them your tax documents, Social Security numbers, or other personal information when making this request.
- Make sure your preparer offers electronic filing. The quickest way to get your refund is to file electronically and
choose direct deposit. Electronic filing is also the most secure, accurate option.
- Look for preparers who work all year, not just in tax season. Confirm that your preparer will be available after the tax filing deadline in case you have questions.
- Research tax preparers and read their reviews to make sure there aren't any red flags. You can check with the Better Business Bureau to make sure the preparer doesn't have a questionable history.
After you select a preparer:
- Provide all records and receipts needed to prepare your return. Good preparers will ask for these and will ask questions to help calculate your total income, tax deductions, and credits.
- Review the entire return and make sure you understand everything about your return before signing.
- Be sure any refund goes directly to you and by direct deposit. Confirm your routing and account numbers on the return are correct. If the SCDOR is unable to direct deposit your refund because of invalid account numbers, you will not be able to resubmit the correct information, and your refund will be sent as a paper check.
- Ask for a copy of your return and keep it for your records.
- If you have to pay the SCDOR, please tell your preparer you want to do so electronically. Visit dor.sc.gov/pay to pay electronically.
How to report suspected tax fraud and identity theft
If you suspect tax fraud or identity theft, report it to the IRS and the SCDOR.
To the IRS:
- Use Form 14157 to report any suspected tax fraud or abusive tax preparers.
- Use Form 14157-A if you suspect a tax preparer filed or changed your return without your consent.
- Use Form 14039 if you are an actual or potential victim of identity theft.
To the SCDOR:
- Use CID-27 to report suspected tax fraud.
- Use I-381 to report if you are an actual or potential victim of identity theft.
For more information
More tips and filing information are available at dor.sc.gov/iit. To learn more about preparing for your federal return, visit IRS.gov.
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