Tax scams, including fraudulent tax return preparation, cost taxpayers billions of dollars every year and is continuing to grow. The Internal Revenue Service (IRS) reports that criminal investigations into fraudulent tax return preparers continue to rise.
Dishonest tax preparers can commit fraud in a number of ways. They can claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients. Fraudulent preparers also may manipulate income figures to obtain fraudulent tax credits, such as the Earned Income Tax Credit.
Missing the signs that a preparer could be abusive could cause the taxpayer considerable financial problems. Some of the most common signs include:
Taxpayers should be very careful when choosing tax preparers. While most preparers provide good service to their clients, a few unscrupulous tax preparers file false and fraudulent tax returns and ultimately defraud their clients. It is important for taxpayers to know that even if someone else prepares their return, they are ultimately responsible for all the information on the tax return. The Better Business Bureau, along with the IRS, recommends that taxpayers follow these tips when hiring a preparer:
Most importantly, taxpayers should always review their return before signing, ask questions on entries they do not understand, and get a copy of the return for their records. Finally, do not ever sign a blank tax form or one filled out in pencil!
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Kelvin Collins is President/CEO of the Better Business Bureau serving the Fall Line Corridor, serving 77 counties in East Alabama, West Georgia, Southwest Georgia, Central Georgia, East Georgia and Western South Carolina. This tips column is provided through the local BBB and the Council of Better Business Bureaus. The Better Business Bureau sets standards for ethical business behavior, monitors compliance and helps consumers identify trustworthy businesses. Questions or complaints about a specific company or charity should be referred directly to the BBB at Phone: 1-800-763-4222, Web site: www.bbb.org or E-mail:email@example.com