It is tax time again – time when local consumers and families file their annual state and federal taxes. Unfortunately,it is also the time when scammers take advantage of unsuspecting consumers to commit identity theft and tax return theft.
Better Business of Acadiana is warning consumers to be on the lookout for the following tax scams:
Identity theft occurs when someone uses your personal information, such as your name, Social Security number (SSN) or other identifying information, without your permission, to commit fraud or other crimes. In many cases, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and fraudulently claim the refund.
Pervasive Telephone Scams
The IRS has seen a recent increase in phone scams across the country, with callers pretending to be from the IRS in hopes of stealing money or identities from victims.
These phone scams include many variations, ranging from instances from where callers say the victims owe money or are entitled to a huge refund. Some calls will even threaten arrest.
If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, send it to email@example.com. Remember the IRS does not initiate contact with taxpayers by email, text or social media to request personal or financial information.
False Promises of“Free Money” from Inflated Refunds
Scam artists routinely pose as tax preparers and use flyers, advertisements, phony store fronts and even word of mouth to throw out a wide net for victims. They may even spread the word through community groups or churches where trust is high.
Victims also report that the fraudulent refund is deposited into the scammer’s bank account. The scammers deduct a large “fee” before cutting a check to the victim, a practice not used by legitimate tax preparers.
Return Preparer Fraud
About 60 percent of taxpayers will use tax professionals this year to prepare their tax returns.Most return preparers provide honest service to their clients, but some unscrupulous preparers prey on unsuspecting taxpayers to commit refund fraud or identity theft.
When filing 2013 tax returns, BBB recommends the following tips:
· Be sure the preparer is a certified public accountant (CPA), tax lawyer or an enrolled agent with a Tax Preparer ID number.
· Be wary of promises of large refunds. Until the preparer knows your situation, there is no way to know whether you’ll get a refund or how big it will be.
· Be sure you can contact your preparer after the end of tax season.
· Know what the service will cost, what it covers and whether the cost changes if you have a complicated return. Ask if the preparer will represent you in case of an audit.
· Before you sign the return, read it over to check for mistakes. Ask the preparer to explain anything you don’t understand.
Taxpayers who believe they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately at (800) 908-4490.
Start with Trust®. Check with the BBB before doing business. The BBB of Acadiana works for a trustworthy marketplace by maintaining standards for truthful advertising, investigating and exposing fraud against consumers and businesses.
The BBB of Acadiana services the parishes of Acadia, Evangeline, Iberia, Lafayette, St. Martin, St. Landry and Vermilion.