Georgia requires no training, licensing for tax preparers

Georgia requires no training, licensing for tax preparers

ATLANTA — Your barber has one, so does your air conditioning repairman. And as of July 1, even your lactation consultant has to be licensed here in Georgia.

But the person you give your Social Security number, and all of your financial information to do your taxes, is not required to have a license, nor any training.

And the state offers no oversight.

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"It's absolutely crazy,” said Liz Coyle, executive director of Georgia Watch, an organization which advocates for consumers. "People have no idea what level of education these people have, how honest they are, what they are really going to do with their personal information and whether or not they'll file their taxes accurately."

She says unless you use a certified accountant to do your taxes, you have no way of knowing whether the person you are trusting is qualified. He or she could be a felon or just plain incompetent, and they don't have to have any tax preparation education.

"If you go to one of them, you could be in real trouble," Coyle said.

This tax season, Georgia Watch sent two undercover customers into 20 different tax offices, particularly in lower-income areas across southwest Atlanta and southern Fulton County.

When

asked Coyle how many of the 20 locations had problems with their returns, Coyle replied: "All of them."

One of the fake customers pretended to be a graduate student. The other posed as a single mother, who had her child only on weekends, which would make her ineligible for deductions.

They recorded their conversations with the preparers.

"A lot of people wanted to make sure that I claimed the child," one of the undercover researchers told Channel 2. "It can get you back $5,000 to $6,000 if you claim the child."

When she had her taxes done correctly by a group that works with the IRS, she should have owed about $200. One of the places she visited got her a $4,000 refund.

"And a lot of these places are not going to back their work or their refunds, and so you're out of pocket," she said.

Thousands of Georgia taxpayers are learning that the hard way.

This month, Georgia's Department of Revenue is sending audit notices to clients of B & B Accounting and Tax Service in Hapeville, which changed its name earlier this year to Hapeville Accounting and Tax Service.

State agents raided the business after a Channel 2 Action News - Atlanta Journal-Constitution investigation exposed inflated refunds prepared by Hapeville City Councilwoman Ruth Barr and her staff.

Investigators say the business' inflated refunds cost the state and federal governments millions of dollars, which the individual taxpayers will have to pay back.

"We'll investigate complaints that are brought to our attention, but our only avenue at that point would be some kind of criminal prosecution," said Georgia Revenue Commissioner Lynne Riley.

Riley believes that more can be done to protect taxpayers from problem preparers.

Records show that Barr had a string of Better Business Bureau complaints, a trail of clients audited by the IRS and even several civil fraud judgments, but none of it ever triggered an investigation.

"There is not a board or an agency that a taxpayer could directly report on the situation because of the lack of licensing," Riley said.

The lack of oversight also means that there is no required education or training, which can sometimes make it tough to tell the difference between mistakes and outright fraud.

"It's a tremendous problem," Coyle said. "We absolutely want Georgia to put in place some common-sense regulations of this industry."

Georgia Watch is urging the revenue commissioner to work with the secretary of state to create an oversight board, with some kind of licensing, discipline or basic training requirements.

"We should be looking to protect taxpayers in every way we can," Riley said.

Riley says hiring someone to prepare your taxes is a "buyer beware" situation.

  • Do not use an office that sets up shop for a few months and is gone the day after tax day.
  • Get your refund directly from the IRS. If you do not have a bank account, have a check sent to you.
  • Don't be convinced to deposit your refund into the tax office account.
  • Watch out for undisclosed fees or products that you didn't request or need.

Only four states currently regulate tax preparers: California, Maryland, New York and Oregon.