State Snags Fraudulent Tax Preparers

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In a recent news report, the state of Maryland identified 20 tax preparers believed by the state to be electronically filing fraudulent returns, and went so far as to publish the names of those preparing firms. Such returns typically claim deductions and credits that do not exist. While some taxpayers knowingly participate in the fraud, other taxpayers are not aware that it is being done.

We unfortunately live in a world where tax fraud and scams are becoming more brazen and aggressive. The vast majority who play by the rules are the ones who pick up the tab for the revenue lost by government agencies. We bear that cost. To help reduce fraud, we suggest the following:

  • Have your tax returns done by a qualified tax professional, preferably a Certified Public Accountant (CPA), and encourage your family, friends, and colleagues to do the same. While non-CPA preparers by and large do quality work, CPA’s are held to higher standards of ethical behavior and technical competence; acting in any manner not becoming of the profession results in severe disciplinary action. The peace of mind this provides is far and away in excess of any small difference in fees.
  • Review your tax return. You are ultimately responsible for what is on your return. If you don’t understand what an item is or why it is there, question it before signing the return.
  • Do not use any preparers who promise high refunds or base their fee on how much you get back.
  • Never consent to having tax refunds directly deposited into any account that you are not in control of.
  • Beware of telephone scams. The surest indication of a telephone scam is the call itself. The IRS and most states will never contact you by telephone. A series of mailed notices is the first form of contact, followed by a visit from a collection agent. If you receive a phone call, hang up and call the relevant government agency to see if there is a problem with your account.
  • Review any tax correspondence carefully. If an IRS notice is unexpectedly received, contact the IRS at 1.800.829.1040 to verify if there is a problem with your account or bring the notice to your tax professional. Do not call the number at the top of the notice, as it may be to a call center ready for its next scam victim.
  • Review your credit reports periodically to be sure that you recognize every entry on them. By federal law, each of the three credit reporting agencies Equifax, TransUnion, and Experian must provide you with one free credit report upon request each year. The Federal Trade Commission has only authorized to provide these reports. While other sites may offer to provide them, they may also attempt to up-sell you on additional services.

For more information, contact Aronson’s Laurence C. Rubin, CPA, at 301.231.6200.

About Laurence Rubin

Laurence Rubin has written 49 post in this blog.

Laurence C. Rubin, CPA, a partner in Aronson's Tax Services Group, has more than 25 years of experience serving small businesses and high net worth individuals. With a passion for technical excellence and a commitment to client service, Larry provides small business start-up and growth stage guidance, tax planning and compliance services. He works with clients to create tax planning strategies that minimize risk, helping them understand the tax implications of their day-to-day choices. Always mindful of his clients’ best interests, Larry helps negotiate tax debts and resolve tax disputes, including individual and business lien and levy relief, income tax examinations, worker classification disputes, reasonable compensation audits of C and S corporations, and other targeted audit programs. His ability to present tax issues in layman’s terms has made him a valuable expert witness or neutral intermediary in civil litigation matters, earning each side’s trust while navigating complex financial issues. Additionally, Larry has specialized expertise in the tax issues faced by same-sex couples.

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