The Southbourne Tax Group: Beware tax preparer fraud, other ‘dirty dozen’ scams


Posted March 15, 2017 by demigodfrey

If you’re rushing to get your tax return in the mail, take care when choosing your tax preparer. If you don’t, you could lose your refund and face fines or jail time if your preparer files a fraudulent return.

 
Tax preparer fraud was the focus of a March 1 alert from the National Consumers League (NCL).

“Getting caught up in a tax preparer scam will not just cheat you out of your refund and scam you into paying bogus fees, it can also expose consumer victims to other liabilities,” John Breyault, an NCL vice president, said in a statement. Those liabilities include hefty fines and even imprisonment associated with the criminal offense of filing a fraudulent tax return.

In February 2017 alone, tax preparers in New York, Nebraska and Louisiana were charged with tax fraud. And in 2015, the U.S. Department of Justice closed more than 35 tax return preparers’ operations because of fraud.

Tax preparer fraud also makes the Internal Revenue Service’s list of the “dirty dozen” tax scams for 2017.

How the scam works: Often, the tax preparer will falsify your earnings, claim credits for you that you didn’t earn or steal your refund by having it deposited into someone else’s account, according to the NCL.

To protect yourself, the NCL and IRS offer tips when choosing a tax preparer, including:

• Check for his or her Preparer Tax Identification Number (PTIN). The IRS offers a tax preparer directory so you can check his or her credentials.
• Refuse to sign a blank tax return.
• Steer clear if your preparer doesn’t require you to submit your W-2s.
• Avoid preparers who charge fees based on a percentage of your refund, or who claim they can get bigger refunds than other preparers.
• Avoid giving your Social Security number or tax documents when you’re just inquiring about a tax preparer’s service. Otherwise they might file a fake tax return in your name.
• Be sure to review your return before it’s filed, and make sure you get a copy of your return.

You also may cut your risk of fraud by getting free tax preparation help sanctioned by the IRS. If you make less than $54,000 a year, you likely qualify for free, in-person guidance through Volunteer Income Tax Assistance programs.

If you make less than $62,000 per year, you can get free online help through the IRS Free File program.

Tax preparer fraud isn’t the only thing to be on your guard against this year. Also making the “dirty dozen” are phone scams, in which fraudsters call up and impersonate IRS agents. These fraudsters claim you owe taxes and try to get you to cough up cash.

Between October 2013 and January 2016, the Treasury Inspector General for Tax Administration received nearly 900,000 reports of such calls, and more than 5,000 victims paid more than $26 million to the scammers.

The fake agents often threaten to sue, arrest or deport you if you don’t pay using prepaid debit cards or wire transfers.

Other frauds on the “dirty dozen” list are phishing emails, which look as if they come from the IRS or a tax software company. If you click a link, you land on an official-looking website and are asked for personal information, which the criminals use to create false tax returns.

Identity theft also continues to be a major concern, with bad guys using stolen Social Security numbers to file fraudulent returns. While the number of identity theft tax cases has plunged, almost 238,000 cases were reported in 2016.

“It’s the second year tax return fraud has decreased,” Breyault says, “but they’re not going to be able to catch all of it.”
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Issued By Demi Godfrey
Country Hong Kong SAR
Categories Accounting , Business , Finance
Tags beware tax preparer fraud , other dirty dozen scams , singapore , the southbourne tax group review business accounting services hong kong , tokyo japan
Last Updated March 15, 2017