Tax time breeds tax return scams

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By The Staff

Attorney General Bill McCollum issued a consumer advisory warning last week for Floridians to be on the lookout for tax-related scams. Complaints about fraudulent tax preparers are reported to the Attorney General’s Office each year, as are issues with identity theft and fraudulent charities.

The attorney general also advised consumers to ask about service fees up front and avoid tax preparers who claim they can obtain larger refunds than anyone else.

“As tax season approaches and Floridians get ready to file for tax returns, scams begin to develop and con artists begin looking for ways to take advantage of people,” McCollum said. “Floridians can protect themselves by being educated about common schemes and reporting fraud to the Attorney General’s Office.”

To avoid being scammed by a non-legitimate tax preparer, consumers should get the credentials of the tax preparer and ask if he or she belongs to a state board or bar association which requires continuing education.

The Attorney General’s Office also recommends that consumers shop around for quotes and ask tax preparers if they will represent consumers who are audited or pay any audit-related fees. Only attorneys, certified public accountants and enrolled agents can represent taxpayers before the IRS in any matter including audits, collections and appeals.

One of the more common scams associated with tax season is “phishing,” which occurs when individuals pose as Internal Revenue Service (IRS) or other government or banking representatives and send consumers e-mails seeking personal information allegedly for the purpose of processing refunds. The e-mails are usually created to look official and may include subject lines that read “Refund Notice” or similarly misleading phrases.

However, the IRS does not send e-mails asking for personal information to process refunds. Consumers can visit the agency’s Web site at http://www.IRS.gov and click on “Where’s My Refund” to check on the status of their refunds.

Another scheme which often surfaces during tax season is the creation of fraudulent charities which e-mail consumers seeking contributions they claim can be written off as tax deductible. Florida law requires charities to register with the Department of Agriculture and Consumer Services and provide financial information about income and expenditures. Consumers have the right to ask for an organization’s financial report and its federal tax identification number which is necessary to claim contributions as tax deductions.

Attorney General McCollum offered the following recommendations to consumers to avoid tax-related scams.

3 Never give out personal identification information to anyone who is soliciting money.

3 Do not respond to e-mails asking for information relating to refunds. The IRS’s Web site is the legitimate source for checking on refund status.

3 Research charities before sending them money and do not respond to e-mail solicitations for money. The Better Business Bureau has a charity research page at http://www.bbb.org, which helps identify legitimate charities.

3 Do not give money to third parties for income taxes on prizes. A legitimate prize distributor must send prize recipients the IRS form 1099 which states the value of the prize won and must be filed with a consumer’s tax return.

3 Do not let anyone purporting to be an agent for the IRS into your home unless he or she has proper identification.

Consumers may file complaints about tax-related scams and any other types of fraud by calling the attorney general’s fraud hotline at 1-866-966-7226, or file a complaint online at http://www.myfloridalegal.com.