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Be careful who you get to do your taxes

A lot of people can hang out a shingle that says they do taxes. That doesn't mean they either know what they're doing or have your best interests at heart.

So, consumers should being aware of potential traps and know that there's no minimum standard for who can prepare taxes.

The National Consumer Law Center and Consumer Federation of America are warning consumers to watch out for shady tax preparers and certain offerings tied to refunds that aren't in consumers' best interest.

When to hire a professional to file your taxes

The only tax preparers who have any sort of official credentials or have undergone testing, the groups said, are certified public accountants, enrolled agents (an IRS credential), volunteers at Volunteer Income Tax Assistance (VITA) and AARP Tax-Aide sites.

Among the products some outfits promote that consumers should watch out for are refund anticipation checks and refund anticipation loans. The two consumer groups warn that both can lead to needless fees.

Refund anticipation checks are issued by the tax preparer through a deduction in the tax refund that covers the tax preparation costs. It essentially defers payment of tax prep charges until the IRS sends a refund.

A temporary bank account is opened for the IRS to direct deposit the refund. The consumer is given a check or a debit card, typically with $25-$60 in fees taken out plus a variety of other possible fees, the groups said. The refund doesn't arrive any faster.

Nearly 22 million Americans got a refund anticipation check in 2014.

With banks getting out of the refund anticipation loan business, some payday lenders and other nonbank lenders are now offering them, the groups said. These loans essentially advance the consumer a portion of the refund, typically with a very high interest rate, plus fees.

Only about 34,000 people sought these loans last year, the groups said.

Another issue is the tax prep fee itself. It can cost $500 or more to get your taxes prepared, the groups said, but it's often difficult get a price quote in advance.

The groups recommend lower-income taxpayers consider free preparation alternatives, such as VITA (you can find locations on the IRS website, and AARP Tax-Aide sites). Some VITA locations will help those without bank accounts to open one or get a prepaid card so consumers can get their refunds sooner without fees.

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