By: Amy Qualliotine, Outreach ManagerPosted on February 25, 2013 Issues: Poverty & Economic Security

7 Tips to Avoid Tax Scams This post is the second in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts.

We’ve all seen it – the person on the corner dressed as some patriotic character spinning around a “HUGE TAX REFUND” sign. Since it’s the taxpayer (YOU) that is ultimately responsible for all the information on your tax return, promises of huge tax refunds are sometimes too good to be true. Here are some tips to help you avoid scams.  

  1. IRS representatives do not initiate taxpayer communication by going go door-to-door or sending emails. If someone knocks on your door or sends you an email claiming to be a helpful representative from the IRS, do not give them your Social Security Number or any private financial information.  
  2. You must provide proof of eligibility for any tax credits you are going to claim. Some preparers claim that if you pay them a fee, they will get you these credits without proof – they can’t.
  3. The Economic Recovery Credit Program, Making Work Pay, and the Recovery Rebate Credit are EXPIRED programs – anyone that says they will get you these credits is trying to pull a fast one.
  4. Avoid preparers that charge a percentage of your refund – they have an incentive to inflate your refund, which is fraud you are responsible for. On that same note – never allow a preparer to inflate your income or claim credits you know that you’re not eligible for.
  5. If you use a tax preparer make sure they sign your return and provide you copies for your records. You should never sign a blank return, or a return that the preparer hasn’t gone over with you.
  6.  Don’t let a preparer talk you into having any of your refund deposited into their account rather than your own.
  7. Trust your instincts. If something feels off about a tax preparer –promises to secure larger returns than competitors, pressure to claim anything you don’t think you’re qualified to claim, offers of ‘free money’ without any paperwork – you might be right. Think twice before providing your Social Security number and private financial information to them.

The IRS wants to hear about any scams you come across. You can call report them here. When choosing a tax preparer you may find it helpful to consult these tips from the IRS.