With the deadline for personal income-tax filings fast approaching, Attorney General Eric Schneiderman today issued tips on steering clear of tax-preparation scams. Some scammers target seniors or college students by impersonating tax authorities, soliciting follow-up information on a tax form, and collecting Social Security numbers and using it to steal people’s money or identities. Other scam-artist tax preparers use “spoofing technology” to make their caller ID numbers look like they are from the IRS.
Taxpayers should be alert to tax-preparation companies that advertise low fees to bring in business, then increase the final fee by hundreds of dollars because, they say, the tax return was more complicated than expected. Another scam is a tax preparer electronically withdrawing more than the agreed-upon fee without providing notice to the consumer.
—Use recognizable and established companies;
—Check the tax preparer’s qualifications, and check the preparer’s history through the Better Business Bureau;
—Ask for a written estimate of all fees;
—Avoid preparers who base their fees on a percentage of your refund;
—Make sure the tax preparer is accessible, even after the April due date;
—Never sign a blank return;
—Review entire return before signing;
—Make sure the preparer signs the tax form and includes a Preparer Tax Identification Number;
—Consult New York’s “Consumer Bill of Rights Regarding Tax Preparers;”
—Beware of refund-anticipation loans and refund-anticipation checks, which can include fees and interest. Preparers cannot market loans as refunds. Consumers can avoid loans by filing electronically and having refunds mailed or deposited into their bank account.
Schneiderman is asking taxpayers to notify his office of any suspected fraudulent schemes to steal personal and financial information. Consumers who feel they’ve been victims of any tax preparation scams can file complaints online or call 800-771-7755.
Taxpayers can get their returns prepared for free at Volunteer Income Tax Assistance sites. Consumers whose annual income is $57,000 or less may qualify for FreeFile and can use free tax preparing and free e-filing software.