Financial information is one of the greatest things that a business value. Entrusting financial information to someone is very crucial because it can lead you to success or distraction. Many taxpayers have been in trouble because they had been fooled with the promise of huge funds or had committed fraud in their name. Here are 6 signs you shouldn’t miss to avoid fraud tax preparers.
6 Things to check before hiring a Tax Preparer: Avoid fraud firms
They promise you a higher refund
These fraud tax preparer’s job is to lure you- he boasts that he can get you a larger refund and even promises you a certain amount of refund without reviewing your financial documents and past tax returns. Once you are fooled by this, it can lead to some serious consequences, even if it is done by the tax preparer. You can be banned from taking the earned income tax credit in the coming years.
The IRS requires every tax preparer to have a valid preparer tax identification number, or PTIN. Once you came across a tax preparer that, have no PTIN, don’t bother to let him prepare the tax returns. To find legit tax preparers with PTIN, the IRS provides a directory of Federal Tax Return Preparers.
You may also encounter tax preparers who claims to be endorsed by the IRS. This is an automatic red flag, as IRS doesn’t endorse anyone and no tax preparer can use the IRS identity within his or her own name or use the IRS or Treasury department seal on advertisements.
Requests you to sign a blank return
Signing a blank return is like signing a contract you haven’t seen- and it means that once you signed it, you are agreeing in their terms and conditions. You are held responsible for all of the important information on your tax return, so make sure to review all of the paper-works of the tax preparer before signing it.
Ask you to deposit your refund in a different account
They suggest that you should deposit your refund in an account that doesn’t belong to you. These fraud tax preparers fools you that depositing your refund in an account will be more quick and convenient, but the truth is you may lose all of your refunds. This is the reason why this is prohibited by the IRS, so better watch out on these kind of fraud tax preparers. You can check IRS refund status time to time and check with your bank as well.
They don’t offer e-filing
E-filing is means of security from the IRS. They requires paid preparers with 10 or more clients to file electronically, and also recommends you to e-file your return and directly deposit your refund into the bank.
They file your tax return using your last pay sub
All tax preparers are required to file tax returns using W-2 and they should review your records, receipts and asks you about your finances. Once you encountered a tax preparer who doesn’t do any of this is an automatic red flag and considered fraud tax preparer, since it breaks the IRS rules.
Many fraud tax preparers are out there and even with punishments and consequences, they won’t be totally removed. Prevention is better than cure, so it is important to watch out for these signs and report the fraud tax preparer immediately to the IRS.