Research tax preparers carefully to avoid fraud
With the approach of the upcoming tax filing deadline, Connecticut Better Business Bureau recommends that you carefully research a tax preparation service or professional before hiring one, to avoid a variety of problems – including identity theft.
The Connecticut Department of Revenue Services is cautioning taxpayers about “Connecticut state income tax verification exercise”emails that lead to websites asking for personal information which could be used for identity theft. In addition, the Internal Revenue Service (IRS) advises taxpayers to avoid tax preparation services that promise a larger refund than their competitors.
There are many preparation options for taxpayers, some of which offer the qualifications and experience of certified professionals who will represent you in case of a problem with the tax collector. There is no such protection if you prepare your own return, or if it is done by a friend, family member, or seasonal storefront preparation service that is only open for a few months of the year. In such cases, it may be difficult or impossible to contact them in the event of a problem.
Retail tax return preparation franchises offer competent service for individuals who need to file a relatively straightforward tax return. However, professionals such as Certified Public Accountants (CPA), Tax Lawyers and Enrolled Agents can represent you if there is a problem with your return. Preparation prices are usually determined by the complexity of the paperwork.
If a tax preparer is sloppy or unethical, you may have to pay fees or fines, lose part or all of your refund, or have your most important personal information used to commit identity theft, including income tax fraud.
- How to Avoid Tax Preparation Problems
Steer clear of refund-based fees – The preparation fee should be based on the complexity of your return – not the size of your refund.
- File electronically – You or your tax preparer can file electronically and receive your refund in a couple of weeks. You may also have your refund deposited directly into your bank account.
- Check the return before it is submitted – Avoid horror stories such as preparers sending in a return without taxpayers’ signature, or missing paperwork. Also make certain that the preparer signs and includes their Preparer Tax Identification Number (PTIN) on the return.
- The IRS has a tax preparer directory to check the credentials of tax professionals at irs.gov, and you can find out more about tax preparation and ongoing tax-related fraud from the state Department of Revenue Services at www.ct.gov/drs/.
- You may choose a BBB-accredited preparer or file a complaint in the event of a dispute at bbb.org.
Howard Schwartz, CT Better Business Bureau