Due to the rising tide of income-tax refund fraud in recent years, the IRS and the Better Business Bureau (BBB) are encouraging taxpayers to file as soon as possible, and to also work with a qualified tax preparer. Doing so will not only expedite your refund, but help protect your tax return information as well.
“Income tax fraud is essentially an identity theft issue, which often begins with a data breach,” says Connecticut BBB Spokesman Howard Schwartz. “Even though taxpayers cannot prevent the theft of sensitive information by cyber hackers, there are steps we can take to lessen the chances of becoming a victim.”
Taxpayers aren’t the only ones at risk. According to the IRS, tax preparers should also be on the look-out for fake filers pretending to seek help with their tax returns, but actually sending an infected email attachment designed to access the personal information of clients.
Luckily, the BBB says the best ways to prevent criminal interception of tax documents are very simple, such as filing returns online through the eFile system and having refunds directly deposited into your bank account. These steps will also help shorten the amount of time it takes to receive your refund.
The BBB also offers the following advice when looking for a reliable tax preparation professional:
Credentials matter. Ideally, your tax preparer should be either a certified public accountant, tax attorney or enrolled agent. Any of the three may represent you before the IRS in all matters, including an audit. Also, find out if the preparer is affiliated with a professional organization that holds its members to a code of ethics.
Look into service fees. Avoid preparers who base their fee on a percentage of your refund.
Don’t trust a “larger refund.” Be wary of any tax preparation service that promises larger refunds than the competition.
Never sign a blank return. Steer clear of preparers that ask you to sign a blank return, claiming it’s “more convenient.”
Make sure they’re accessible. Many tax preparation services only set up shop for the months leading up to April 15. But if the IRS finds errors or requires an audit, you need someone you can access throughout the year.
Read the contract carefully. Ensure you understand how much the service is going to cost, how the cost will be affected if preparation is more complicated and time-consuming than expected, and whether the tax preparer will represent you in case of an audit.
Ask around. Be sure to get referrals from friends and family, and check the BBB Business Reviews of prospective tax preparation services at bbb.org.