Tennessee Department of Commerce and Insurance (TDCI) warns Tennessee residents to avoid falling prey to scammers and phony tax preparers ahead of the April 15 Tax Day deadline.
Unfortunately, when a fraudulent tax return is discovered, it’s the taxpayer, not the return preparer, who pays any additional taxes and interest and who may be subject to penalties. The best protection for taxpayers is a simple one: Do your homework.
Check them out. Tax returns can be created by anyone with a Preparer Tax Identification Number. Before hiring someone to prepare your taxes, check your tax preparer’s credentials by using either TDCI’s One Stop license verification database or the Internal Revenue Service’s Directory of Federal Tax Return Preparers to check if your tax preparer has the training and proper licensure. Only attorneys, certified public accountants (CPAs) and enrolled agents can represent taxpayers for audits, collections and appeals.
No fees, please. Avoid preparers who base their fees on a percentage of the amount of the refund. Be careful of using tax preparers 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. Under no circumstances should all or part of your refund be directly deposited into a tax preparer’s bank account.
Never sign a blank form. Whether you file tax returns electronically or by paper, never sign a blank tax return. Before signing your return, always review it with your tax preparer and ask questions. Make sure the return is accurate before you sign it.
Paperwork and questions. Good preparers will ask for your receipts and ask you multiple questions in order to determine if you qualify for expenses, deductions and other items. By asking you questions, a good tax preparer is trying to help you avoid penalties, interest or additional taxes.