Most income tax preparation services offer a legitimate, if over-priced, service. They help prepare a legitimate tax return. There are others, however, who might prepare an illegitimate return to make extra money.
Be careful of any income tax preparation service that promises to get you a refund, this is a good sign that this service is not legitimate. Such service cannot guarantee you a refund before they know anything about your finances. Such statements are frivolous. You should avoid any tax preparation service that charges a percentage of your tax refund as payment.
Ask yourself if you believe this person will be able or willing to support you in an IRS investigation.
Check on his or her credentials. Only attorneys, accountants, and enrolled agents have the right to represent the taxpayer in all matters. The income tax preparation service you hire can only support issues regarding returns they have prepared.
Ask for references from people for whom they have prepared income tax returns. They might try to tell you that this is proprietary because it is tax information, but taxpayers can volunteer a testament of good business conduct with no risk or violation.
Look for affiliations and memberships in things like the Chamber of Commerce or the Better Business Bureau.
Ask if they have any certification or accreditation.
Find out how long they have been in business. Finding out how long they have been preparing taxes is a good barometer of how reputable their business dealings have been. Generally, the most reputable income tax preparation services are the ones in business the longest.
Ask them if they have ever supported a client in an Internal Revenue Service Tax Audit.
Be sure to compare prices. When doing this, check out the rates of a small CPA office and compare them to the major chains. You will certainly get a more qualified person t prepare your income tax return, and the fees might be closer than you think.