Fraudulent tax return preparers are back!
Tips On How To Avoid Fraudulent Tax Preparers
With this being tax season, the Federal Justice Department urges the public to look out for and avoid fraudulent tax preparers who illegally swindle both their clients and the federal treasury. Below are some tips that may seem obvious and others that may not seem so obvious.
- Look for a PTIN. The IRS requires that all paid tax preparers register with the IRS and obtain a preparer tax identification number (PTIN).
- Never allow your refund to be deposited directly into a tax preparer’s bank account. Courts have barred such a practice.
- Never sign a blank return or a return without fully reading it from beginning to end first.
- Never allow your tax preparer to mischaracterize expenses. By this, I mean that you should never allow personal purchases to be wrongly characterized as deductible expenses.
- Never allow your tax preparer to fabricate expenses or deductions. Some common ones are the educational credit, the child care credit or the earned income tax credit.
- eFile. The eFiling method is considered the safest and most reliable.
- Look for professional credentials or listings with the Better Business Bureau in choosing a tax preparer.
- Avoid a tax preparer who engages in any of the following fraudulent acts:
- Fabricating fake Form W-2 information;
- Claiming nonexistent education and first-time homebuyer credits;
- Claiming nonexistent child and dependent care credits or residential energy credits;
- Claiming nonexistent fuel tax credits;
- Inflating unreimbursed employee business expense deductions; and
- Fraudulently manipulating one’s income to maximize the Earned Income Tax Credit.
IRS Will Never Call You Or Email You about Tax Issues. Beware Of Fraudulent Tax Credit Return Scams
On a related note, look out for identity theft. Remember that the IRS will never call you or email you about issues related to your taxes. If you have any doubts about whether an IRS contact is authentic or fraudulent, contact the IRS at 800-829-1040 to confirm it.
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Joseph E. Balmer
Joseph Balmer manages the Probate, Trust and Estate Administration department at Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has been certified by the Ohio State Bar Association as a specialist in Estate Planning, Trust and Probate Law since 2006.