December 18, 2010 @ 5:05 pm
posted by admin

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A friend who lives in another state, we’ll call him Larry, recently had questions raised about his 2007 income taxes. Like most of us, he had used a tax preparation service to prepare his return and was very prompt in filing his return in early April of 2008. One difference, perhaps, is that Larry tends to be thrifty and will often resort to nephews of friends, cousins of friends, and even “friends of friends’ in getting things done. We still kid him about the “free mulch” he had spread on his lawn that was apparently collected from a weed field.

Anyway, Larry pulled together his tax return and paperwork, and drove over to see his tax preparer “friend of a friend”. To his surprise, the office had been closed and any telephones disconnected. So, Larry quickly contacted the friend who had referred him – only to hear “I wondered what happened to her… haven’t heard from her in quite a while.” In a bit of a panic now, Larry tried everything he could think of to find the person. But, as might be expected, the “friend of a friend” had apparently pulled up stakes and moved on to places unknown. Even a search on the web did not provide a useful lead.

Larry (not his real name) is still in the process of trying to get things resolved, so I won’t violate his privacy any further, but his situation interested me enough to look into just how often things like this happens. Sadly, thes search showed a lot.From what I’ve been able to determine, there doesn’t seem to be a valid headcount anywhere of just how many tax preparers are out there. In addition, I was a bit surprised to find out that there doesn’t seem to be a universal requirement for licensing or registration that must be revealed to customers – at least none that Larry might have been knowledgeable enough to ask about.So, as we might expect, in many cities, “friends of friends” set up, prepare people’s returns, and promptly go out of business – and probably out of town – when tax season is over.

Now, just for clarification purposes, let me emphatically state that there are many preparers who are licensed by state and federal authorities – these include many lawyers, accountants or CPAs. So, please don’t panic! There are many reliable and trustworthy preparers out there. The key is to ask if there is any doubt about their credentials, especially if they are a “friend of a friend”.Unfortunately, many consumers never think to ask this type of question – and sadly, often become members of Team Larry. In today’s economy, I suspect that a lot of us are being thrifty, just like Larry was. But as the old saying goes, “You get what you pay for… or you might wind up paying for what you got!

“Interesting, huh? Let me know what your thoughts: Email me at

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