Taxfiling season officially opened on January 31 and the BetterBusiness Bureau of Central New England is warning consumers to beware of agrowing crime known as tax preparer fraud. According to the Internal RevenueService, tax preparer fraud occurs when a preparer “alters return informationwithout their clients’ knowledge or consent in an attempt to obtain improperlyinflated refunds or to divert refunds for their personal benefit.” The taxpayeris usually unaware of the preparer’s actions but is left liable for thediscrepancies.
Inresponse to the prevalence of return preparer fraud, here are some schemes tobe cautious of:
- 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 atrustworthy 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’s 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.
Alwaysremember to protect your identity. The IRS has issued severalconsumer warnings about the fraudulent use of the IRS name or logo by scammerstrying to gain access to consumers’ financial information in order to stealtheir identity. The IRS does not initiate taxpayer communications throughemail. Unsolicited email claiming to be from the IRS, or from an IRS-relatedcomponent such as the Electronic Federal Tax Payment System (EFTPS), could be ascam, check into it before opening any links or responding to these emails. Ifyou are unsure of what to do, or you believe you may be the victim of a scamcontact your Better Business Bureau.