Department of Revenue and Office of Consumer Affairs Join Forces to Protect Taxpayers from Filing Season Tax Preparation Scams
Choose wisely when selecting a tax preparer
(Boston-February 5, 2015) - Massachusetts Revenue Commissioner Amy Pitter joins Consumer Affairs Undersecretary John Chapman to warn Massachusetts taxpayers that following a few sensible steps when choosing a tax preparer can make a very big difference. Taxpayers are legally responsible for the information on their tax return, regardless of who prepares the return.
“Criminals who pose as tax preparers to victimize taxpayers by stealing their identity and pocketing fraudulent refunds tend to do so in the first couple of months of the tax season,” said Commissioner Pitter. “We urge taxpayers to take some simple steps to be sure they are getting one of the many legitimate tax preparation professionals.”
Undersecretary Chapman noted that “Scammers come out of the woodwork this time of year, posing as tax preparers and looking to defraud hard-working Massachusetts consumers. You need to make sure the person you hire is reputable before giving them access to your personal and financial information. In the wrong hands your identity is in great jeopardy.”
At Greater Boston Legal Services, which offers low income taxpayer assistance, Luz Arevalo said they see poor families, often immigrants who can’t speak English, victimized by so-called preparers who make up information or manipulate income so their clients can qualify for the earned income tax credit or the senior property tax credit.
“When our clients fall prey to these preparers, they pay a high price, not just with lost refunds, potential penalties and interest, but in mental distress and anguish,” said Arevalo. “Of course I want taxpayers to take all the precautions but if I were to choose just one, I would ask taxpayers to be sure they have the preparer sign their tax return – it’s really important to get the name on the return.”
The best protection for taxpayers who need help in preparing a state or federal tax return is to know who is preparing their taxes by asking questions:
Are they qualified?
Paid tax preparers are required to have a preparer tax ID (or PTIN). Ask to see it along with proof of membership in a professional organization. You may also want to check a preparer’s history for any disciplinary actions with the Better Business Bureau or the Massachusetts Board of Public Accountancy.
Do they charge service fees?
Avoid those who charge a percentage of your refund or who claim they can obtain larger refunds than other preparers. Always make sure any refund due is sent to you or deposited into an account in your name. Do not have your refund deposited into a preparer’s bank account.
Do they e-file returns?
Paid preparers who file more than 10 returns to the IRS or DOR must file returns electronically. It is the safest method for processing returns and the quickest way to get a refund. Whether filing electronically or by paper, never sign a blank return. Before you sign your return, review it and ask questions. Make sure you understand everything and that you are comfortable with the accuracy of the return before you sign it.
Do they want to see your records and receipts?
Good preparers will ask for your records and receipts and will also ask questions to report total income to get you the tax benefits that you are entitled to claim, including the Earned Income Tax Credit (EITC) for low- and moderate-income workers. Taxpayers can check their EITC eligibility by visiting the IRS Credit & Deductions page at www.irs.gov.
Did the tax preparer sign your return?
Paid preparers must sign returns and include their PTIN as required by law. The preparer must also give you a copy of the signed return.
Taxpayers can find a printable checklist on choosing a reputable tax preparer on the Department’s website, as well as a related video series on YouTube. To report any tax preparation scams or questionable preparers, please contact the Office of Consumer Affairs hotline at 617-973-8787 or toll free in Massachusetts at 888-283-3757.
Taxpayers can also take advantage of free tax preparation services such as DOR’s online WebFile for Income. Volunteers trained by the IRS and DOR also staff libraries, senior centers and other sites in Massachusetts to help you prepare your taxes and safely transmit your return to the IRS and DOR based on your income and age eligibility. To find the site closest to you visit free tax filing information at www.mass.gov/dor.