State Snags Fraudulent Tax Preparers
- Tuesday, 21 February 2017 08:00
- Laurence Rubin
- 562 Views
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 annualcreditreport.com 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.