Tax filing season opens January 30; therefore, Better
Business Bureau is warning consumers to beware of a growing crime known as tax
preparer fraud.
According to the Internal Revenue Service, tax preparer fraud occurs when a
preparer “alters return information without their clients’ knowledge or consent
in an attempt to obtain improperly inflated refunds or to divert refunds for
their personal benefit.” The taxpayer is usually unaware of the preparer’s
actions but is left liable for the discrepancies.
In response to the prevalence of return preparer fraud, here are some of the
specific schemes the IRS is warning about:
- Internet
solicitations that direct taxpayers to toll-free numbers and then solicit
Social Security numbers.
- Homemade
flyers and brochures implying credits or refunds are available without
proof of eligibility.
- Offers
of free money with no documentation required.
- Promises
of refunds for “Low Income — No Documents Tax Returns.”
- To
find a trustworthy professional to help prepare your taxes, BBB offers
these tips:
- Get
references and do your research. Get referrals from friends and family on
who they use and check out the company at www.bbb.org to see its BBB
Business Review.
- Look
for credentials. Seek a tax pro who is an enrolled agent, certified public
accountant or a tax attorney. These preparers have completed extensive
examinations on tax matters and must stay current by meeting continuing
professional education requirements.
Only CPAs and tax attorneys can represent you in U.S. Tax
Court if you are audited.
- Get a
firm estimate in writing. The cost of preparing your return will vary
depending on the complexity of your information. Before you agree to move
forward, present all of your information and get a firm estimate in
writing.
- Don’t
fall for the promise of big refunds. Be wary of any tax preparation
service promising larger refunds than the competition, and avoid tax
preparers who base their fee on a percentage of the refund.
- Protect
your identity. The IRS has issued several consumer warnings about the
fraudulent use of the IRS name or logo by scam artists trying to gain
access to consumers’ financial information in order to steal their
identity. The IRS does not initiate taxpayer communications through email.
Unsolicited email claiming to be from the IRS, or from an IRS-related
component such as the Electronic Federal Tax Payment System (EFTPS),
should be reported to the IRS at phishing@irs.gov.
For more information about tax fraud, and other consumer
news, visit www.bbb.org
or call (800) 892-3584
