Waiting until the last minute to file your taxes? If you're using a paid preparation service, you should pay particular attention to whether they're licensed, experts warn.
According to Jill Schlesinger, CBS News business analyst, there were about 140 million tax returns filed in 2011. Seventy-nine million of those returns were filed by paid preparers, and more than half of the paid preparers -- 42 million -- were not licensed.
"This is sort of mind-blowing because you think it's an important thing," Schlesinger said Wednesday on "CBS This Morning."
The growing problem even has been highlighted by lawmakers.
"The absence of meaningful oversight of much of the tax preparer industry is harming too many citizens who can least afford it," Sen. Ron Wyden, D-Ore., said at a Senate hearing Tuesday.
The IRS took steps to regulate paid preparers in 2011, but in February, a federal court struck down an IRS program that required preparers to take competency tests and continuing education courses.
Those who are filing through a tax preparer can protect themselves by going to a large, well-known institution over small "pop-up shops," Schlesinger said.
"You can ask somebody up front, 'How much do you charge?' because part of this is about fee disclosure," she said. "A lot of these folks are getting paid based on the amount of tax return they get for you, and they are able to cut a deal where they go to the IRS and say, 'Pay us out of the refund.'"
Schlesinger had some other tips for last-minute filers:
- File electronically: E-filing has a 1 percent error rate as compared to 20 percent error rate for paper filing. You will also receive the tax refund within three weeks versus six to eight weeks for paper filing.
- Use IRS.gov's "Free File" software if your income is less than $58,000 per year
- Arrange for direct deposit of tax returns