Avoiding Tax Preparer ScamsJanuary 16, 2018
Tax season is upon us, and we hope you plan to stay ahead of identity thieves by filling your taxes early. However, you should be careful who you trust with your tax information, because the wrong move could net you problems with the IRS!
On its website, the IRS warns taxpayers to be alert to scams such as tax refund fraud. This typically involves using a stolen Social Security number (SSN) to file a return and claim a fraudulent refund. However, a growing number of scammers are hijacking refunds through the tax preparer’s system, making scams harder to spot and harder to prove.
Thieves use email or email phishing campaigns to trick tax preparers into giving up their passwords or IRS account and routing numbers. After they have the information they need, they can hack into preparer systems and redirect tax refunds to themselves. This is usually done after the preparer completes the tax return, so the taxpayer and preparer are unaware of the modification until weeks or months later, when the tax refund doesn’t arrive. The IRS is helping tax preparers avoid these scams through an education program called “Don’t Take the Bait.” In addition, you can help stop these scams by thoroughly reviewing your returns before your preparer submits them.
You can also protect yourself by choosing your tax preparer carefully. During tax season, people flock to pop-up tax preparation offices and in-store booths, and many don’t check out the preparer’s security measures or training. A Registered Tax Return Preparer is only required to take 15 hours of continuing education each year, and the IRS does not require a preparer to pass a background check or to sign your return when they submit it. Even though you’re paying someone to prepare your tax return, you’re responsible to the IRS for its accuracy. So, before you select a tax preparer, ask them what they’re doing to protect your information.
Unfortunately, tax refunds are expected to arrive later than usual this year. Following the massive Equifax data breach, the IRS will be doing extra screening to combat the anticipated flood of fraudulent tax returns. So be patient, but vigilant. Choose your preparer carefully, review your return thoroughly, file early, watch for any signs of tax fraud, and notify the IRS right away if you see problems. With any luck, all will go smoothly and you can rest easy for another tax year.