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How We See It

Ken Hartley

Ken Hartley

February 25, 2013

BEWARE: Tax Fraud Season

                                                                                        Tax Fraud

As tax season gets underway, we would like to join the Internal Revenue Service in reminding our banking customers and fellow taxpayers to be on the lookout for potential scams. Common scams frequently used against taxpayers include “IRS Phishing,” “Fraudulent Tax Preparers,” and “College Credit Scams.”

Tax scams never die. They may lay dormant during the off-season, but one thing is certain – “when the tax season begins the tax scammers get back to work.” Here’s some advice to help you recognize a possible tax scam:

Phishing:     Be cautious of any “unsolicited” letter, telephone call, email, or text message from a person claiming to be with the Internal Revenue Service. The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

Many of these phishing attacks claim they can speed up your tax refund check, or your tax return may have been lost in the mail.  The crooks that send these phishing scams may have email addresses that look very similar to the IRS, or have official sounding businesses.  What they get around to ask you is, “what’s your name, social security number, and credit card information.” 

Think about it! Why would the IRS need your name and social security number?  I’m quite sure they have all that information on file from your past tax returns.

Fraudulent Tax Preparers:     As the federal income tax season gets into full swing, the IRS warns taxpayers to beware of tax preparer fraud.  This is when a preparer “alters return information without their clients’ knowledge or consent in an attempt to obtain improperly inflated refunds or to divert refunds for their personal benefit.”

Taxpayers should get references on their taxpayer and do research, look for credentials, get an estimate in writing, and protect their identity. Don’t fall for promises of big refunds.

While most preparers provide excellent service to their clients, the IRS urges taxpayers to be very careful when choosing a tax preparer. It is important to know that even if someone else prepares your return, you are ultimately responsible for all the information on that tax return.

College Credit Scams:     By mid-January 2013 the IRS said it has identified a tax scam on college campuses in the southeastern region of the United States centered on the promise of an education tax credit.

The scam artist is basically looking for social security numbers, or checking or savings account information from the college student, as well as a preparation fee.  The scam artist will put up flyers on college campuses, as well as advertise on the Internet and try to lure the college student in so he or she will provide that information.

Once they get that information, they file a tax return on their behalf; do not pay them back for the preparation fee; and use the checking or savings account information for their own means.

Helpful Hints:

If you receive an email, text, or electronic message claiming to be from the IRS that contains a request for personal information:

  1. Do NOT reply.
  2. Do NOT open any attachments. Attachments may contain malicious malware that will infect your computer.
  3. Do NOT click on any links.
  4. Forward the email as-is, to
  5. After you forward the email and/or header information to theirs, delete the original email message you received.

Helpful Hints When Choosing a Return Preparer:

  1. Avoid tax preparers who claim they can obtain larger refunds than other preparers.
  2. Avoid preparers who base their fee on a percentage of the amount of the refund.
  3. Use a reputable tax professional who signs your tax return and provides you with a copy for your records.
  4. Consider whether the individual or firm will be around to answer questions about the preparation of your tax return months, or even years, after the return has been filed.
  5. Review your return before you sign it and ask questions on entries you do not understand.
  6. No matter who prepares your tax return, you (the taxpayer) are ultimately responsible for all of the information on your tax return.
  7. Never sign a blank tax form.
  8. Find out your tax preparer’s credentials. Is he or she an accredited tax preparer, enrolled agent, certified public accountant (CPA), licensed public account, or tax attorney?
  9. Only attorneys, CPAs, and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection, and appeals.
  10. Other tax return preparers may only represent taxpayers for audits.
  11. Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
  12. Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?


(*) If you suspect tax fraud or know of an abusive tax return preparer, you should report this activity to your nearest IRS office. You can contact the IRS by phone at 1-800-829-0433.


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