Tips for avoiding scams and successful income tax preparation

Tax season is now upon us so here’s a Flashback Friday post on how to find reputable tax preparation and avoid tax-related scams.

It’s tax preparation time of year! And for those Americans who expect a refund, the tax season is heating up. But before you hurry out to get your taxes done, do your homework to make sure your tax “professional” is not out to scam you. Both the IRS and Better Business Bureau warn taxpayers against using preparers who claim they can get you a bigger refund than anyone else. Fraudulent preparers may boost refunds by manipulating income to qualify for tax credits, or by claiming inflated expenses, false deductions or exemptions. Under these circumstances, a bigger refund is never good!

Even if you fall victim to a fraudulent tax preparer, it is you who is ultimately responsible for the accuracy of all the information contained in your tax returns. The importance of this cannot be stressed enough! When someone else prepares your returns, if the returns are wrong, you will be liable for back taxes, interest, and perhaps monetary penalties. Even worse, some folks may be facing jail time for filing false tax returns.

Although most tax preparers are honest and do excellent work, it’s crucial to carefully select who you entrust your tax work. It’s worth repeating that if your preparer messes up, whether by mistake or intentionally, you will be held accountable.

How to choose a tax preparertax preparation

1. Beware of anyone who promises they can get you a bigger refund than other preparers.

2. Stay away from a preparer who bases the fee on a percentage of your refund.

3. Use a reputable preparer who signs your return (required by law) and provides its IRS-issued tax identification number (also required by law).

4. Be sure to get copies of your returns.

5. Look over your returns before signing them, and ask about any entries you do not understand.

6. NEVER sign a blank tax return. Remember, you are ultimately responsible for the information on your tax forms.

7. Think about whether your tax preparer will be around to answer questions about your returns if you are audited. Keep in mind that an audit can happen years after filing.

8. Find out about the tax preparer’s experience and credentials.

9. Ask friends and family for referrals to trustworthy tax preparers. Or, ask if anyone has experience with the preparer you are thinking about, and if they were satisfied with the service.

Free Tax Preparation Resources

Keep in mind that you may qualify for free preparation of your tax returns. Even moderate income levels may be eligible – so don’t assume you make too much money for this service. Check it out to be sure.

If you live in Minnesota, you can find more information at Claim It, including who qualifies (for example, a single filer earning $30,000 a year is eligible), what you need to bring to a tax appointment, and local tax prep sites near you. Prefer to do your taxesVITA yourself? A free online tax tool called “MyFreeTaxes” is also provided.

If you live elsewhere and want more information about free tax clinics, call the IRS at 1-800-906-9887, or visit the IRS website and search for “VITA”. Or, here is the VITA Locator Tool link.

Getting your tax returns prepared correctly is important. Don’t let your enthusiasm for a quick refund lead to choosing someone who lures you in with empty promises. Or worse yet, steals from you by charging excessive fees or gets you in trouble by cheating on your tax returns. If it seems too good to be true, it usually is!

If you have questions about any of this, other financial topics, or just want to create a personalized spending plan, call LSS Financial Counseling at 888-577-2227. To get started on a budget quickly and easily, you can BEGIN ONLINE COUNSELING now. It’s efficient and just as effective as in-person or phone financial counseling. Our Certified Financial Counselors are always here to help!

By Barbara Miller

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9 comments on “Tips for avoiding scams and successful income tax preparation
  1. Jay Jorgenson says:

    There was a time a couple of years ago where I completely forgot to certain things on my taxes and it ended up costing me. I can really see how having a good tax preparer can be beneficial to a lot of people! I really like what was said about getting copies of your tax forms JUST IN CASE!

  2. Jordyn Crane says:

    Really amazing guide. Very valuable tips.

  3. VideoPortal says:

    Other suggestions for finding a reputable tax preparer include making sure that the preparer will sign the return and provide a copy, checking the preparer s fees before the return is prepared, never agreeing to sign a blank return, and checking the reputation of the preparer to be sure there is no questionable history and that other tax clients have been satisfied.

  4. Annika Larson says:

    We have been looking at getting someone to help with our taxes. It’s important that they are trustworthy and experienced with preparing taxes. As you suggested, we’ll be sure to avoid anyone who might promise the ability to get you a larger refund than other preparers. Thanks for sharing!

  5. Max says:

    I really appreciated your list about how to find a good tax preparer, especially staying away from someone who takes a percentage of your refund. I’m terrible at doing my own tax stuff, and I love my refund check, so being able to keep my check and know up front what I’m going to be paying would be nice. I’m going to have to remember your article for when time rolls around to get all of my tax things organized again!

  6. Max Jones says:

    I’m always looking for ways to do things easier and better, and I think that being able to do my tax filing online would be worth a shot. I like how you talked about a free online tax filing tool that is provided if you want to do your taxes on your own. I’ve done taxes by hand the last couple of years, and I think that being able to file online would be a welcome change for my wife and I! Thanks for the suggestion!

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