IRS says tax identity theft on the downswing
The IRS says identity theft income tax return fraud plummeted in 2016, with a 46 percent drop in the number of victims, to 376,000. In addition, the agency says it also stopped one million fraudulent refunds from being issued last year with savings of almost $6.6 billion.
“It took considerable work to make a significant dent in the number of tax fraud victims, but clearly the efforts are paying off in a big way, and that is very good news for consumers,” said Connecticut better Business spokesman Howard Schwartz in a statement released Monday. “After years of fear on the part of taxpayers, especially those who need their refund to survive, this is very positive news,”
Income Tax Return Fraud begins identity theft. Scammers gather people’s personal information from a variety of sources. That information is subsequently used to file a tax return in your name and claim your refund. Victims usually discover what has happened after they file a legitimate return and are told it already has been processed and the refund sent out.
If you have yet to file your income tax return, the Connecticut BBB has some tips to help you find and evaluate a tax preparation service or professional:
Verify qualifications – Check the preparer’s credentials. Attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other tax return preparers may only represent taxpayers for audits of returns they actually prepared.
Ask about additional service fees – This includes what happens if your return is more complex than anticipated, so ask about what that would cost.
Carefully review the completed tax return – Make sure it is signed both by you and the preparer and that they put their Preparer Tax Identification Number PTIN on the return as well.
Get contact information – In case of any sort of problem with your return, you want to be able to reach the preparer not just for the next month or two but for three, four or six months down the road.
Don’t wait too long – Get your tax return done as soon as possible, and sign up to get your refund deposited directly to your bank account.
Tax professionals have differing levels of skills, education and expertise.
If your return is simple, national income tax preparation franchise preparers do a great job. If your income tax return is complex, you might want to consider using an account or tax specialist.
You can save money by preparing your tax return online with IRS eFile or software, or have a trusted friend or relative prepare your return. The caveat, is that if there is a problem you will probably feel a lot more comfortable if an enrolled agent, tax lawyer or certified public accountant does your return, inasmuch as they can represent you in tax court if necessary.
You can check out or find a tax preparation professional here.