With two months to go before Tax Day, now’s the time to help wealthy clients who need a new preparer get one. Just watch out for signs of a bad preparer.

“Most high-net-worth clients are generally not aware of the red flags,” said Bruce Primeau, CPA, president at Summit Wealth Advocates in Prior Lake, Minn. “Most folks just blindly trust that every preparer is the same and can adequately prepare their tax return despite there being considerable differences in abilities.”

Many clients may be aware of the problem of questionable preparers, but many believe it couldn’t happen to them, said Brian Stoner, a CPA in Burbank, Calif.

“The IRS urges taxpayers to avoid preparers who promise a big refund or who charge fees based on the size of the refund,” said James McGrory, CPA and shareholder at Drucker & Scaccetti in Philadelphia. As this filing season started, the IRS also warned about “ghost” preparers who don’t sign a return that they prepare.

Other common red flags include preparers who lack filing credentials or who decline to provide support in the event of an audit.
“Not quoting a fee for the preparation leaves open a possibility of the preparer charging a larger fee than would be reasonable. Always get a fee quote in writing,” Stoner said. “A preparer not signing the return or not putting down his information or PTIN [preparer tax identification number] should be an excuse to run for the door.”

The IRS maintains a searchable list of all the tax practitioners that the agency has disciplined.

“A reputable firm presumably will have vetted their own professionals, but it doesn’t hurt to do your own research,” said Laurie Kazenoff, co-chair of the tax practice group and partner at the law firm Moritt Hock & Hamroff in Garden City, N.Y., and a former senior attorney with the IRS. “It’s always a good idea to obtain [a preparer] through reliable referrals, checking qualifications – are they a CPA? – using a Google search and checking the IRS website.”

Also check with your state’s Board of Accountancy, said James Sorenson, CPA and senior manager of advisory and tax services with Rehmann in Vero Beach, Fla. “Pay attention to whether your preparer is meeting your needs or is avoiding your questions,” he added. “Keep all the factors in mind, not just price. If you’re paying too little, the preparer may be cutting corners. Ask how they manage securing data and how they utilize technology.”

Primeau noted he doesn’t run into too many tax preparers who guarantee tax refunds or charge fees as a percentage of refunds. “Both would be a giant red flag to me as the client’s financial advisor,” he said. “In my review of professionally prepared returns over the past 20-plus years, I’ve found a lot of obvious issues that the preparer should have found and have circled back with those preparers to correct. It’s when a few of those preparers then tried to charge the client for the amended tax return that I counseled them that perhaps it was best to move on.”

Tax prep firms should be in business all year. “Beware of tax-filing operations that didn’t exist last year or that close on April 15th for the remainder of the year,” said Scott Kadrlik, a CPA and managing partner at Meuwissen, Flygare, Kadrlik & Associates in Eden Prairie, Minn. “High-net-worth clients should be looking for references from family and friends with similar tax situations [and] looking to professional tax preparers, such as a CPA.”

Ultimately, responsibility falls on the taxpayer to ensure the return’s accuracy. “If you haven’t been given a copy of the return, you should request it and conduct a review,” Kazenoff said. “Aside from rare circumstances where reliance on the accountant is deemed reasonable by the IRS, a good motto to live by is, ‘Once you sign it, you own it.’”