Tax tip: Use preparer with a PTIN

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By Jim Carr By Jim Carr

TEMPE, Ariz. -- Creating flower arrangements comes natural to Karin Crawford. She owns God's Garden Treasures, a flower shop in Tempe. 

While dealing with flowers is second nature to her, preparing taxes is not. That's why, come tax time, Crawford hires someone with a little more expertise.

“If you're not paying your taxes correctly, payroll taxes, sales taxes, if you're not doing them accurately, or you're not running your business by the numbers, you're going to go out of business,” she said.

But past experiences with tax preparers haven't been all that rosy.

One year, Crawford says she actually caught a $50,000 mistake on her tax return, an oversight by her preparer who did taxes on the side.

“It's just so scary and frustrating and you feel like you have a professional that knows more than you, and then you catch something like that,” she said. “What else is there?”

To cut down on the number of non-qualified tax preparers, the IRS is now requiring anyone who is paid to prepare taxes to have a Preparer Tax Identification Number, or a PTIN.

“What they IRS is trying to do with the PTIN is track which preparers are good preparers and which preparers are bad preparers,” CPA Shauna Wekherlien said.

Wekherlien, also known as the "Tax Goddess," is a certified public accountant who says she's heard countless tales of tax nightmares from people like Crawford.

“In a lot of cases, what was happening is you'd have Uncle Joe who sits in his kitchen and does your tax return and you pay him $100 to get that tax return done,” she said. “But, maybe Uncle Joe doesn't quite understand all the tax rules.”

A PTIN is an 8-digit number starting with the letter "P." It costs about $65 to get and requires preparers to take a tax competency exam, a background check, and 15 hours of continuing education each year.

All this is a relief for Crawford, who says knowing her taxes are done correctly gives her more time to do what she's good at.

“I'm really glad that there is more verification of the tax preparers now,” she said. “It’s a great thing.”

Crawford will have two extra days to file her taxes this year, as will everyone else. That's because the typical tax deadline of April 15 falls on a Sunday and the following day is Emancipation Day, a holiday observed in Washington, D.C.