Can Anyone Prepare a Tax Return for Someone Else?

Choose your tax preparer carefully.

Choose your tax preparer carefully.

The Internal Revenue Service advises taxpayers to check the qualifications of the individual preparing their tax returns. The registration requirements of the preparer depend on whether she is compensated to prepare the return. Failure to properly evaluate your tax preparer can have unpleasant consequences.

Uncompensated Preparers

If the tax preparer is not paid for his services, he does not need to possess any qualifications. A parent can prepare the return of a child who is too busy to do so on her own. A helpful neighbor or friend can also do the same, if you do not pay the person. You should place the person's name on the 1040 form and have him sign the form only if you pay him. If there was no fee involved, the preparer's name will not go on the 1040.

Compensated Preparers

If a preparer is paid to work on your tax return, she has to be have a preparer tax identification number, or PTIN. This requirement began on Jan. 1, 2011, and you may therefore have used paid preparers in the past who did not have an identification number. Currently, however, a tax return that has the name of a paid preparer but fails to supply a PTIN will be rejected by the IRS.

Verifying Preparer's PTIN

When in doubt, check the registration status of your preparer at the National Directory of Registered Tax Return Preparers & Tax Professionals home page. You only need to know the name and state the preparer is registered in to search the database. According to the directory, all individuals who have assisted in "all or substantially all of any U.S. federal tax return, claim for refund, or generally most other tax form submitted to the IRS" must be registered with the IRS and have a PTIN.

Other Considerations

Registration with the IRS as a paid tax preparer does not mean that, in case of a dispute, the preparer can represent you in court. While some preparers have the legal qualifications for such representation, others do not. The complexity of your tax return should determine what kind of tax preparer you select. The accuracy of your tax return is ultimately your responsibility. Disclose all pertinent facts to the preparer and provide all documents, such as receipts. The IRS also warns taxpayers to never sign a blank tax return. Check the final tax documents before you sign and send them to the IRS.

 

About the Author

Hunkar Ozyasar is the former high-yield bond strategist for Deutsche Bank. He has been quoted in publications including "Financial Times" and the "Wall Street Journal." His book, "When Time Management Fails," is published in 12 countries while Ozyasar’s finance articles are featured on Nikkei, Japan’s premier financial news service. He holds a Master of Business Administration from Kellogg Graduate School.

Photo Credits

  • Creatas/Creatas/Getty Images