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Tax Prep Nightmare: Don't Get Ripped Off by Your Tax Pro

Tax problemsWe all know to expect occasional poor service. If you hire someone to prepare your taxes, for example, you know that there's a chance they might miss a deduction or credit you're eligible for. They might need to be nudged along by a phone call. But you certainly wouldn't expect your refunds to not arrive, or for the office to be shut down without notice.

Alas, that's the experience many people have been having with a tax-prep company called "Mo Money Taxes." The problem is so significant that the Better Business Bureau has issued a warning about the company, with the BBB of the Mid-South giving it its lowest rating, an F. (The company's offices in other parts of the country have received a range of ratings.)

The Complaints

Complaints about the company have been plentiful, and many are reportedly not being responded to or resolved. The BBB notes that the Arkansas Attorney General sued Mo Money in 2010 for not properly disclosing its fees. In cities such as Norfolk, Va., and Memphis, Tenn., police have shut down Mo Money offices and confiscated their computers. The U.S. Department of Justice has been asked to investigate.
What are some of these complaints? Well, some tax refunds due last month have yet to arrive. Some customers -- who trusted the company with their financial records, not to mention their Social Security numbers -- are finding their local offices closed. Many claim that the company didn't answer or return their phone calls. Some even allege that the company filed fraudulent tax returns. And while Mo Money has sometimes blamed the IRS for refund delays, when some customers checked with the IRS about that, they were informed that refunds had indeed been issued.
It's just a bad, bad scene.

What to Do

If you're not yet a customer of Mo Money Taxes, I suggest you don't become one. You can save yourself a world of headaches and possible financial losses that way. If you are one, or if you've had bad experiences with a different tax-prep outfit, know that you can file a complaint with the IRS.

If you'd like to check the status of a return filed by Mo Money or anyone else, you can do so at the IRS website.

Know that most taxpayers can expect the IRS to issue a refund within about 21 days -- and only 10 if the return was e-filed and a direct-deposit account listed.

Choose Your Tax Pro Carefully

Don't apply your caution too narrowly. Tax-prep folks other than Mo Money can give you trouble. Be smart about selecting who helps with your return and your experience (and possibly your refund) will be better for it. Here are some tips:
  • A new regulation requires all tax preparers who will file returns for customers to register with the IRS and receive a preparer tax identification number, or PTIN. Be sure anyone you deal with has a PTIN.
  • You also want to have some reassurance that the preparer knows his or her stuff. Check their credentials. You want someone who's a certified public accountant (CPA), an enrolled agent (which is what the initials "E.A." after their name will mean), or perhaps a tax attorney. Such folks typically are required to keep learning about tax developments. You can make sure they do indeed have these credentials by checking up on CPAs at your state's board of accountancy or the American Institute of CPAs, on enrolled agents at the IRS Office of Professional Responsibility, and on tax attorneys at your state's bar association.
  • For even better odds of success, look for someone who has been in business for more than just a year or two, and favor those who belong to professional organizations. Ask for references, too -- ideally, gather them from people you know who have used the preparer.
  • Think of tax preparation as a year-round endeavor, not something you just think about every April. Ideally, you'll want to use a tax preparer who's in business all year long, so you can ask occasional questions to help in your tax planning. There are many strategic moves you can make throughout the year that can lower your bill in April.
  • Shop around. Compare the costs and services offered by several different preparers. You can locate some preparers near you via the website of the National Association of Tax Professionals.
  • Interview candidates a little, too (in person), to be sure you feel comfortable with them and will enjoy working with them. Find out who exactly will be preparing your return -- the person you're speaking with, or an underling? Inquire about their qualifications and accessibility. Ask what will happen if you're audited -- will the preparer represent you before the IRS? How long will it take to get your return done? It's a good sign if the preparer has some questions for you, too!

Take a little time choosing a tax pro carefully and you can make your tax season much more pleasant.
Longtime Motley Fool contributor Selena Maranjian holds no position in any company mentioned. You can follow Selena on Twitter @SelenaMaranjian.

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Lou Patten CPA in Lake Worth, Florida is a full-service CPA. This CPA gives you the personal attention your financial affairs deserve. You will always speak directly with the CPA and your tax problems will surely be resolutions.
Mr. Patten has been a practicing accountant for personal and business affairs since 1977. He has a longstanding rapport with his clients. Check him out at www.loupattencpa.com or call at 561.868.0426.

November 14 2012 at 9:08 PM Report abuse rate up rate down Reply
Wayne Bradshaw

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May 05 2012 at 11:50 PM Report abuse rate up rate down Reply

I love that anyone would take something as important as their tax returns to a place called Mo Money Taxes. If they can't spell, what makes you think they can add?

February 21 2012 at 11:26 PM Report abuse rate up rate down Reply

I love that anyone would take something as important as their tax returns to a place called Mo Money Taxes. If they can't spell, what makes you think they can add?

February 21 2012 at 11:26 PM Report abuse rate up rate down Reply

"Dont get ripped off by your tax pro" because the IRS hates competition

February 21 2012 at 9:54 PM Report abuse rate up rate down Reply

Well, this author sounds like she is working for Obama's Internal Revenue Service, because she is repeating just what they have on their web site! Some of the worst prepared tax returns that I have examined have been prepared by an attorney! They don't have time to deal with Tax issues! CPA's are not going to waste much time on a simple return when they can make $150.00 per hour doing audits! Get Real!

The current IRS Commissioner is following Obama's footsteps and promoting the Overly Educated Elite as the way to go! However, the most important advice that is given is "KNOW YOUR PREPARER!"

And make sure that the preparer knows you and everything about you so that he can advise you in a proper fashion. Things have gotten much more complex under Obama, and the rules have changed. More proof is needed for so much and the Tax Return has gotten much thicker today! More Forms are required, more paper work is needed, and the time required to complete a standard return has increased. Returns that have taken as little as 15 minutes in the past now requires an interview process that can take as long as 2 hours! Don't believe everything that Obama tells you about helping the "little people!"

February 21 2012 at 11:37 AM Report abuse +1 rate up rate down Reply

Not all tax preparers are "crooks". All profession have good individuals and bad people. Do not discount the capabilities of ordinary tax preparers. Many times we catch errors made by Attorneys, CPA and EA.

February 17 2012 at 3:48 PM Report abuse rate up rate down Reply

Not all tax preparers are "crooks". All profession have good individuals and bad people. Do not discount the capabilities of ordinary tax preparers. Many times we catch errors made by Attorneys, CPA and EA.

February 17 2012 at 8:39 AM Report abuse rate up rate down Reply

I have been using Turbo Tax for a few years now. I recently found out that their computer program as well as their so-called human tax experts have absolutely no idea how to do a New York State tax form for someone who was a resident for only part of the year. Despite the fact that I itemized what income was earned in what State, Turbo Tax continues to overstate my NY income by more than fourty percent. A telephone call with a representative of the NYS Department of Taxation confirmed that I, and not Turbo Tax, was right. He suggested that I might want to change my tax preparer for my State return.

February 16 2012 at 10:02 PM Report abuse rate up rate down Reply

My office has been in business since 1994. I have over 35 years of experience in Accounting, Auditing and Doing Taxes. You may contact me at shmickens@aol.com or 901-332-2815. My nme is Sam Mickens. You will be glad you did!!!!!!!!!!!!

February 16 2012 at 6:00 AM Report abuse -1 rate up rate down Reply