One of the major goals of the IRS is to help taxpayers steer clear of fraudulent tax companies and professionals because they not only steal taxpayers’ money, they also steal from the IRS by filing fraudulent tax returns to receive large refunds.
There are three broad categories in which tax services can be divided: tax preparers, tax resolution companies, and licensed tax professionals. Even though there are regulatory and qualifying requirements for all three, fraudsters use illegal methods to dupe taxpayers and the IRS.
Staying protected from tax fraud requires caution. The tips below will provide protection for taxpayers when using tax services:
- Check Qualifications: Ask your tax preparer for their PTIN (Personal Tax Identification Number). Every PTIN is unique, and provided by the IRS. Check the background, staff, location, and any complaints against a tax professional or company before hiring them.
- Fees: Most tax resolution companies charge a reasonable up-front fee, but fraudulent tax companies charge exaggerated up-front fees or retainers that add up. Tax preparers that offer to charge you a percentage of your tax refund as their fee may try to unethically get a bloated refund. Choosing a tax preparer with a flat fee reduces the risk of fraud.
- Investigate: Ask for multiple contact details, including phone numbers, email addresses, websites and fax numbers. Google the numbers to check their authenticity.
- Never Sign without Knowing: If a tax preparer, tax lawyer or tax resolution company asks you to sign a blank form, tax return or any other document, do not sign the document or trust that “professional.” Review the documents before signing or submitting them to the IRS.
A taxpayer’s caution is necessary for the successful filing of tax returns and the resolution of a tax problem. Asking questions is the first step towards finding legitimate tax help. Being updated on the latest changes by the IRS in the qualifying factors for tax services can assist in spotting and reporting tax fraud this tax season.