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IRS-Related Scams
Question: I made a New Year's resolution to get my taxes filed early this year. I've talked with a few tax-return preparers, and one assures me that he can get me a substantially larger refund than any other preparer could get me. Is this too good to be true?
Answer: Probably. You've raised a good question, especially for this time of year. We all hope to save money, but remember that old saying, "If it sounds too good to be true, it probably is." According to the IRS, dishonest preparers lure people in with promises of bigger refunds. Even if you pay someone to prepare your return, you are still responsible for the information it contains. And if additional taxes are owed because the return included inaccurate information, you will have to pay.
The IRS offers these tips for choosing a tax preparer:
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First, stay away from return preparers who promise you a larger refund than you can get from anyone else.
- Stay clear of preparers who base their fees on a percentage of your refund.
- Hire a tax preparer who will both sign the original return and give you a copy for your own files.
- Take into consideration whether the preparer (or the preparer's firm) is likely to be around months or years from now to help with questions about your return.
- Never sign a blank tax form -- you are responsible for the information on it.
- Investigate the preparer's credentials. For a preparer to be able to represent you before the IRS in all matters, the preparer must be an attorney, CPA or enrolled agent. Other preparers may represent you only for audits of returns they prepared.
- Check out the preparer with the Better Business Bureau, the California State Bar (for attorneys) or the California Board of Accountancy (for CPAs). Also, find out if the preparer belongs to any professional organizations that have continuing education requirements and codes of ethics.
- Ask for and check the preparer's references. Find out if others you know have used the preparer and whether they were pleased.
| As part of investigating a tax preparer's credentials, consider using H.E.L.P.'s free "Ask First!" form. Ask the professional to disclose in writing his or her credentials and ways of being paid. Click here to obtain a copy of the form. |
IRS Phishing
If you use e-mail, you've likely received "phishing" e-mail. Scammers use phishing to steal your personal identifying and financial information. The scammers send e-mail messages that appear to be from "official" institutions, such as your bank or credit card company, and that request information about your account. If successful, they take that information and use it to obtain access to your accounts and/or run up debt in your name.
Phishing has reached the tax realm. The IRS reports a recent scam in which individuals receive an e-mail - which appears to be from the IRS -- notifying them of a refund waiting to be claimed. Clicking on a hyperlink takes the person to an official-looking website, where the individual is asked to fill in his or her Social Security number and credit card number.
According to the IRS, it does not initiate correspondence with taxpayers about their accounts through e-mail. If you receive an e-mail that purports to be from the IRS, you can call (800) 829-1040 to determine whether the e-mail is authentic.
March 1, 2006
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