Connecticut BBB Offers Tips On Selecting

A Tax Preparer, Avoiding Taxing Scams

WALLINGFORD — The Better Business Bureau urges consumers who hire someone to prepare their tax returns to use caution when selecting tax preparation help.

While most tax preparers are honest and professional, every year BBB receives thousands of consumer complaints against tax preparers, which typically state the tax preparer made errors in their return, resulting in fines and excessive fees.

There were 2,068 complaints nationwide against tax preparers in 2010, and 8,434 over the past three years, the standard BBB reporting period. BBB offers these tips on choosing a trustworthy tax preparer:

Check credentials. 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.

Service fees. Avoid preparers who base their fee on a percentage of your refund.

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 “for convenience.”

Ensure accessibility. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors or an audit, you might need to be able to contact your tax preparer throughout the year.

Read the contract carefully. Ensure you understand how much it is going to cost for the service, 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.

Provide all records and receipts needed to prepare your return. Reputable preparers will request to see your records and receipts and ask multiple questions to determine your total income and qualifications for expenses, deductions, and other items.

Ask around. Get referrals from friends and family, and check the BBB Business Reviews of prospective tax preparation services at www.bbb.org.

Income Tax Scams

In other tax-related consumer news, Connecticut BBB is warning taxpayers to beware of several income tax scams. Their common thread is an e-mailed request for personal information that is supposedly used to “update records,” and their goal is identity theft.

Every year at this time, scam artists use people’s fear of the Internal Revenue Service (IRS) to get victims to cooperate.

In one variation, an e-mail purportedly from the IRS tells you that you need to submit information for your W-2, a US federal tax document filled out by employers. The e-mail tells the recipient to click on a link to input the information. The link either takes the victim to an official-looking page to fill out private information, or downloads malicious spyware onto their computers.

In fact, W-2 forms are submitted by employers, not taxpayers, and the IRS sends letters — not e-mails — when it needs more information. This is one of several IRS scams that make their rounds at this time of the year. Sometimes the e-mail comes from the “Treasury Department” stating a refund or tax inheritance is waiting and the taxpayer needs to provide personal information.

Do not click on any links in unknown e-mails or give out personal information, including Social Security number, home address, or birth date to anyone who e-mails or calls you. Another red flag is if the e-mail has a lot of punctuation and spelling errors.

The IRS did recently released a mobile app that allows users to check the status of their tax refunds. The app, IRS2go, is available for free download to iPhones and Androids.

Taxpayers are prompted to provide some basic information, then select the filing status of their tax return and enter the amount of money they expect to receive from the IRS.