Definition of an Income Tax Preparer
When it comes to filing tax returns, all of the forms and tax credits can seem confusing and overwhelming for some. Income tax preparers are people who are skilled in the preparation of tax returns and can make sense of all the forms for you.
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Tax Preparers
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Anyone who has a basic knowledge of tax laws can become a tax preparer with proper training. Personal accountants and attorneys may also provide tax preparation services.
Function
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A tax preparer uses information provided by an individual to prepare or aid in the preparation of federal, state and local tax returns. They may also provide assistance to those who have been audited by the IRS.
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License
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Through 2009, only California and Oregon required income tax preparers to obtain a license. The IRS announced in January 2010, though, that it would require all paid tax preparers in the nation to become licensed. As of the end of 2010, the program was still being phased in.
Legal Requirements
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All preparers must exercise due diligence when preparing a return. They are also required by law to sign any returns that they prepare and provide a copy of the return to the individual they prepare it for.
How to Choose a Tax Preparer
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Tax preparers may be paid or can be volunteers. Always be sure to use a reputable preparer as you will be sharing personal and valuable information with her. Ask for references and statistics on how many audits or wrongly filed tax claims the preparer has been responsible for.
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References
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