FREMONT – According to the IRS, around 60% of taxpayers hire a professional to file their returns. With the changes that were made to Federal Income Taxes last year, there are new considerations to be taken into account as you file your return, and ignorance of the law is no excuse. It’s of primary importance that you file your tax return accurately. If you are among the many hiring a professional to guide you through the complexities of filing, your Better Business Bureau (BBB) has advice.
The need for speed
As is true every year, procrastination can cause you problems. That’s because thieves want to “beat you to the punch” If someone has stolen your Social Security Number (SSN) or Taxpayer Identification Number (TIN), they may file a fraudulent return before you file your legal one. It can be a chilling moment months from now, when you are informed by the IRS that a tax return has already been filed using your name and your SSN. (And of course, a refund was already claimed by the crook.) The ensuing process of trying to straighten out the mess will take months and cause you countless headaches. Avoid such a nightmare by filing as quickly as you can!
Ghostly apparitions to beware of
Recently, the IRS has issued warnings to taxpayers about scammers who appear this time of year known as “ghost tax preparers.” While these “ghosts” take your payment for preparing your tax return, they do not sign the return themselves. They lack a valid 2019 Preparer Tax Identification Number (PTIN), which by law, all legitimate tax preparers must have. They tell the taxpayer to sign and mail the return they have prepared. There is no verification of their assistance on the return. That is why they are called “ghosts.”
These ghost preparers are after a fast buck by promising you a big refund or by charging you fees based on a percentage of the refund. Here are some other traits ghost preparers often exhibit:
- They want payment in cash and don’t give you a valid receipt.
- They invent income so you will qualify for tax credits.
- They claim fake deductions to boost refund amounts.
- Refunds may be directed into their own accounts instead of your account.
Any of the above red flags can indicate you are dealing with a ghost tax preparer rather than a legitimate one.
Take these precautions when selecting a tax preparer
Here are BBB’s tips to help you through the important selection process:
- Ask the preparer for their PTIN number and check them out at the irs.gov website. Do a search on the site for Directory of Federal Tax Return Preparers with Credentials and Select Qualifications, where you can enter their number. (Or go to https://irs.treasury.gov/rpo/rpo.jsf)
- Check out the tax preparer at bbb.org for their business reviews and record of consumer complaints.
- Quiz the preparer about their areas of expertise, background and experience. Is it what you need?
- Get referrals from friends.
- Get an estimate of cost and ask how it is determined.
- Know that immediate payment of a refund is actually a loan and understand its terms. Read the fine print.
- Be sure the preparer can be reached throughout the year in case of IRS questions later.
- Ask if they will represent you if audited and what the cost would be.
- Ask if their work is checked by another person.
- Ask if they have ample time for you, especially if they do a huge volume of work for others.
If you have more questions or concerns regarding the selection of a tax preparer, contact your BBB at 800-649-6814 or visit our website at bbb.org.