It’s that time of year again: time to pay Uncle Sam his share of taxes. But before you run out and hire the first tax preparer you can find, it may be worthwhile to do your homework.

Unfortunately, not all tax preparers are equally qualified. Arming yourself with some basic knowledge before hiring a preparer could go a long way in ensuring you get the proper refund and preventing future action by the IRS.

“A lot of firms out there or individuals can put out a shingle and say I do taxes and they don’t have to have any training,’’ said Jennifer MacMillan, a Santa Barbara, Calif., enrolled agent who specializes in individual income taxes. ”Tax preparation isn’t regulated at all.”

According to the Better Business Bureau, 32.5% of complaints against tax preparation companies claim preparers made errors in tax returns, mistakes that caused consumers to pay fines and added fees to fix. Another 19.5% complained tax preparers weren't responsive and didn’t return repeated calls or attempts to get help, answer questions or provide copies of their tax information.

Against that backdrop, here are some tips that may prevent you from being one of the many who were unsatisfied with their tax preparer.

Procrastination Doesn’t Pay, but Homework Does

Judging from the long lines at post offices until very late on April 14, the day before taxes are due, many people wait to the last minute to file their taxes. But by putting off the inevitable, you may end up working with a less-than-stellar tax preparer and harming yourself. Both the Better Business Bureau and the IRS said finding a tax preparer should be similar to how you would find a doctor or dentist, and not a decision to be made lightly.

“Consumers looking for trustworthy help filing their taxes should not wait until the last minute. They need to take time, shop around and find a preparer who is both qualified and has a strong track record of providing customer service,’’ said Better Business Bureau spokesman Steve Cox in a recent press release. “Some consumers who rushed through the process in 2007 are still dealing with the mess their tax preparer made as they head into the 2008 tax season.”

According to the IRS, consumers should chose a preparer they can contact after the return is filed and one who is likely to be responsive. Getting references from people who have used a specific tax preparer could go a long way, as does checking if there are any complaints against that preparer. The IRS encourages taxpayers to find out whether a tax preparer belongs to professional organizations that require continuing education.

Tax preparers who are enrolled agents, or licensed by the U.S. Department of the Treasury to represent taxpayers, are often members of the National Association of Enrolled Agents, while certified public accountants [CPA] are typically members of associations like the American Institute of certified Public Accountants. Tax attorneys are also a good resource for people who have complex taxes and want extended representation.

Sure these professionals may charge more than some less experienced preparers, but it may save you money in the long run if it saves you from an IRS audit. What’s more, CPAs, tax attorneys and enrolled agents can represent taxpayers before the IRS in all matters, including an audit.  

“CPAs might cost more, but CPAs are very well qualified,” said Thomas Ochsenschlager, vice president of taxation for The American Institute of Certified Public Accountants. “If a CPA is found to be unscrupulous or even careless it’s very easy to lose their license.”

Either way you go, there are basic questions that the tax preparer should ask before preparing your taxes. According to the IRS, reputable tax preparers will request to see your financial records and receipts and will ask a litany of questions to determine your total income and your qualifications to claim expenses, deductions and other items.

Buyer Beware

Of course the goal when filing your taxes for many is to get the biggest refund possible. But experts caution that promises of lofty refunds could be a red flag and a reason to avoid a preparer.

“Anybody that claims to get you a bigger refund than anyone else indicates a willingness to stretch the rules beyond what’s allowed,’’ said enrolled agent MacMillan. “People go to preparers because they don’t understand taxes. If the return is prepared unethically they will never know until the IRS nabs them.”

Ochsenschlager of The American Institute of Certified Public Accountants said another red flag is any company that offers to arrange a refund anticipation loan or looks to sell you things other than the preparation of your taxes.  The Better Business Bureau for its part, urges consumers to avoid any tax preparers who base their fee on a percentage of the amount of the refund.  It may also pay to find a tax preparer used by people in your field or trade. Those preparers will be well versed in your special needs.

The Better Business Bureau also suggests consumers read the tax preparation service contract closely to understand how much it’s going to cost, added fees if the tax preparation is more time consuming and complicated than first thought, and whether the tax preparer will stand by their work and represent the consumer if there is an audit.

“Many consumers end up being held responsible when their tax preparer makes mistakes or errors on their return,’’ said Cox of the Better Business Bureau. “Few things are as certain as death and taxes, but it’s also true that few things are as scary.”