Wednesday, March 21, 2012

Utah Tax Commission warns of tax preparer fraud

About 60 percent of taxpayers in the U.S. will use tax professionals this year to prepare and file their tax returns, according to the IRS. And while most return preparers are honest, the Utah Tax Commission says there are also those who prey on unsuspecting taxpayers.

Among the scams the commission is warning taxpayers about is one that tells the victim they can get a large refund even if they have little or no income. Another comes in the form of an email saying the victim filed their taxes incorrectly, so they need to amend the return online.

The IRS says signals to watch for when dealing with an unscrupulous return preparer would include that they:

• Do not sign the return or place a PTIN on it.

• Do not give victims a copy of their tax return.

• Promise larger than normal tax refunds.

• Charge a percentage of the refund amount as preparation fee.

• Require the victim to split the refund to pay the preparation fee.

• Add forms to the return the victim has never filed before.

• Encourage the victim to place false information on the return, such as false income, expenses and/or credits.

For advice on how to find a competent tax professional, see Tips for Choosing a Tax Preparer.

Deseret News