Tax preparer fraud has been widespread and made it to the IRS Dirty Dozen Tax Scams last year. Even though most tax preparers are honest professionals, there are an unscrupulous few that defraud the IRS and their clients to pocket refund money. It is important to know the extent of the problem so that we are better prepared to tackle it. OA Online shares the statistics, reminding us to be cautious when hiring a tax preparer:
“BBB serving Central, Coastal, Southwest Texas and the Permian Basin recommends that you take the time and use caution when selecting a tax preparer. Every year, BBB receives thousands of complaints against tax preparers. BBB has seen a rise in tax preparer complaints over the last three years.
“In 2013, BBB received nearly 4,000 complaints against tax return preparation businesses across the United States.
“Common complaints state that the tax preparer made errors in their return which resulted in fines and fees. Other complaints claim customer service, billing and contract issues.
“There is also the risk of tax identity theft. This occurs when someone uses your Social Security number and personal information to file a tax refund in your name.
“According to the Federal Trade Commission’s 2012 Consumer Sentinel Network Data Book, statistics show tax identity theft accounted for over 40 percent of identity theft complaints.”
To stay protected from scam tax preparers, the BBB offers the following advice shared by OA Online:
“Ask around. Get referrals from friends and family on who they use. Check the BBB Business Review of the tax preparation service you plan to use at bbb.org for detailed complaint information. Use checkbbb.org for a list of BBB Accredited Businesses.
“Look for credentials. Ideally, your tax preparer should either be a certified public accountant, a tax attorney or an enrolled agent. All three can represent you before the IRS in all matters, including an audit.
“Don’t fall for the promise of a big refund. Be wary of any tax preparation service promising larger refunds than the competition. Avoid any tax preparer who bases their fee on a percentage of the refund.
“Think about accessibility. Many tax preparation services only set up shop for the months leading up to April 15.
“In case the IRS finds errors, or in case of an audit, make sure you are able to contact your tax preparer at any time of the year.
“Read the contract carefully. Read tax preparation service contracts closely to ensure you understand issues such as how much it is going to cost for the service, how the cost will be affected if preparation is more complicated and time consuming than expected and whether the tax preparer will represent you.”
Your caution selecting honest tax preparers and reporting the fraudulent ones will help in preventing many taxpayers from falling victim to fraudulent tax preparers. Consider safety your priority when hiring professional help for tax preparation during the tax season.