SEATTLE — According to the Better Business Bureau, tax scams are among the most "stubborn cons" out there and they reappear often, each time with a slightly different spin.
The main theme is scammers posing as the Internal Revenue Service (IRS) in the U.S. or as the Canada Revenue Agency (CRA) in Canada, trying to trick people into either paying up or sharing personal information.
This year, United States taxpayers must file their income tax forms before the April 18, 2023 deadline. This date also marks the deadline to request a six-month extension.
If you had any life changes in the past year, buying a home or becoming a business owner, finding a trustworthy tax preparer is a good idea.
The BBB of Washington wants to remind people that not all tax preparers have the same level of experience and training.
- Review the tax preparer’s credentials. EAs, CPAs, and tax attorneys are all qualified to represent their clients to the IRS on all matters. Other preparers can help you with forms and basic matters but cannot represent you in case of an audit. Don’t be afraid to ask about these or other qualifications before you hire someone.
- Be wary of spectacular promises. If a tax preparer promises you larger refunds than the competition, this is a red flag. Many such tax preparers base their fees on the amount of your return and may be likely to use shady tax preparation tactics. In addition, it’s wise to avoid tax preparers who offer “refund anticipation loans” as you’ll probably lose a large percentage of your return to commission fees.
- Get referrals from friends and family. One of the best ways to find a trustworthy tax preparer is to ask your loved ones for recommendations. Once you have a few options, check BBB.org, paying careful attention to other consumers’ reviews or complaint details. This will give you a clear view of what you can expect.
- Think about availability. If the IRS finds errors in your tax forms or decides to perform an audit, will your tax preparer be available to help you with the details? Find out whether you can contact the tax preparer all year long or only during tax season.
- Ask about fees ahead of time. Before you agree to any services, read the contracts carefully and understand how much the tax preparer charges for their services. Ask about extra fees for e-filing state, federal, and local returns, as well as fees for any unexpected complications.
- If things don’t add up, find someone else. If a tax preparer can’t verify their credentials, has a record of bad reviews from previous clients, or their business practices don’t seem convincing, don’t do business with them. Remember that if you hire them, this individual will handle your sensitive personal information – information you need to keep safe from corrupt or fraudulent tax preparers.
For more tips on finding someone you can trust with your finances and sensitive personal information, click here.