Tax Preparation Fraud-Posting Twenty - Five

It is that time of year again - tax time - and many of you will be looking for someone to prepare your tax return for you. We know that the majority of tax preparers are honest, hard-working individuals. However pretty much anybody can call themselves a tax preparer, so be aware. Make sure that the individual that you are handing over all your valuable personal information to is legitimate. Look for credentials and continuing education, and make sure to ask for referrals. In fact perhaps the best way to find a tax preparer is to obtain a referral from someone you trust.

What we want to warn you about are those unscrupulous people out there that are looking to scam you. Your tax return comes complete with all of the information that a criminal needs to steal your identity and use it to take your money, your possessions and ruin your credit. You do not want to hand your identity over to just anyone. As the deadline gets closer people often panic and just pick whoever is cheapest or whoever promises the largest refund.

Identity theft is the latest big thing in tax-preparation scams and the IRS has provided several tips to keep in mind when selecting a tax preparer:

• Avoid preparers who base their fee on a percentage of the amount of the refund. This may encourage the preparer to be less than honest and go for larger than allowable refunds to increase their fee;

• Consider whether the preparer will be around to answer questions months or even years later;

• Find out if the preparer is affiliated with a professional organization that provides continuing education;

• Check out the preparer’s credentials. Attorneys, certified public accountants and enrolled agents can represent taxpayers on all matters before the IRS. Others can only represent them for audits of returns they prepared;

• Read your return carefully before signing and never sign a blank return to be filled out later. Tax payers must understand that no matter who fills out their return they are ultimately responsible for it.

Good Luck with preparing your returns and watch out for potential scams. If you have a story that you would like to share about tax preparation fraud or any another fraud, please contact me through this blog. We will fight fraud together.