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Better Business Bureau

BBB: Watch out for tax preparation scams

Consumers expecting a tax refund might be looking forward to filing their taxes early this year, but the Better Business Bureau of Southern Arizona warns to be cautious of tax preparers who claim they can get larger refunds than their competitors.

According to IRS investigators, some preparers may use their clients' personal information to file falsified returns, and may keep most of the fraudulent refund for themselves while leaving you on the hook.

It's important to note that the taxpayer is ultimately responsible for the accuracy of all information on a tax return, even if someone else prepares it. Individuals with fraudulent tax returns can face significant prison time as well as payment of back taxes with interest and penalties.

The BBB recommends following these tips from the IRS:

  • Avoid preparers who base their fee on a percentage of the refund.
  • Use a reputable tax professional who signs the tax return and provides you a copy.
  • Consider whether the individual or the tax preparation firm will be around to answer questions about the tax return months, or even years, after the return has been filed.
  • Check the preparer's credentials.  Only attorneys, certified public accountants and enrolled agents can represent taxpayers before the IRS in matters including audits, collections and appeals.
  • Find out if the preparer is affiliated with a professional organization that provides its members with continuing educational resources and holds them to a code of ethics.
  • Ask friends and family whether they know anyone who has used the tax preparer before, and whether they were satisfied with the service they received.

Report suspected tax fraud activity to the IRS immediately by completing a Form 3949-A, Information Referral. Whistleblowers may also provide allegations of fraud to the IRS using Form 211, Application for Award of Original Information, and may be eligible for a reward.

Some taxpayers may be eligible to have their taxes prepared for free through the United Way of Tucson and Southern Arizona's Volunteer Income Assistance program. Visit www.unitedwaytucson.org/vita for more details.

Check out any preparer with the BBB by visiting www.tucson.bbb.org, or calling 888-5353 if you don't have Internet access.

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