NC does not require tax preparers to get license (SOURCE: MGN Online).
Family fined $200 for following bad advice from tax preparer (SOURCE: MGN Online).
WILMINGTON, NC (WECT) -
You ask, we investigate. A Wilmington woman contacted us, upset that the tax preparer she paid $600 to file her tax returns gave her bad advice.
The tax preparer told this woman in writing that she wouldn't owe anything - so she didn't need to file for an extension. But he was wrong, and now the consumer is facing a $200 fine from the state for following the tax preparer's advice not to file an extension.
You might assume that tax preparers know what they are doing, but that's not always the case.
The industry is largely unregulated. In North Carolina, tax preparers don't even need a license to operate, and many have little formal training.
If they make a mistake, your only real recourse is to file a complaint against them with the IRS, or to sue them in civil court. For many people, that's just not worth the hassle or added expense to pursue a lawsuit.
It's not just bad advice from a tax preparer that could cause you trouble. There have been cases where tax preparers intentionally defrauded their clients in order to pocket part of their tax return.
So it's really worth doing your homework on the people with whom you are sharing some of your most sensitive financial information.
The IRS recommends doing some research on a tax preparer before you hire them. Make sure they have a PTIN (Preparer Tax Identification Number), and ask if they belong to any professional organizations. In addition, the IRS suggests checking with The Better Business Bureau to see if your preparer has a questionable history.