Avoid Tax Rip Offs!

February 17, 2009

COLUMBUS, Ga-(WTVM)-With a sign for tax preparation businesses on what seems to be every corner, it's tough tell which ones are safe.

"I've been told that there's a prep firm in town that will tell you, get in early, we'll sell you a dependent for $500," says Ann McNeer, President of Master Tax Solutions.

McNeer says she and her associates often spend time fixing incorrect returns completed by other preparers.

"We've seen situations where the return that people get a copy of, is not the return that's filed," says McNeer.

So how can you stop that from happening to you?

We found there aren't any standard regulations that govern all tax preparers, so taxpayers have to do their homework.

McNeer is what's called an Enrolled Agent, a designation from the Internal Revenue Service that allows representation in an audit. Plus, many Certified Public Accountants, and attorneys file taxes.

Consumers can verify a CPA's credentials though the Secretary of State's office in Georgia.  Also, consumers can check with any state bar association about an attorney.

"What about those people that are not CPAs, not EAs, not attorneys, what gives them ability to do your return," poses McNeer.

According to IRS officials, there are several red flags taxpayers can look for.

"If the individual immediately tells you that he or she can get you a large refund without looking at your W-2s, that's people you need to stay away from," says IRS Spokesperson Mark Green.

Also, find out what the service fees are before the return is prepared. Next, only use a tax professional that signs the return and gives you a copy. Make sure you avoid tax preparers that ask you to sign a blank tax form.

In addition, choose someone that will be around to answer questions after the return is filed.

Consumers can also check with the Better Business Bureau, and McNeer advises people to use their own eyes and ears to get the best information.

"Are they a member of any organization, are there any plaques on the wall, do, have you heard anybody talk about them in a positive way, any experience in the neighborhood, have they been there a while, is it a new building, old building, is the building safe?"

Because in the end, it's the taxpayer, that will be held liable with the law.

"We definitely, strongly encourage taxpayers to pay attention, choose wisely because the person you choose to complete your return, you're held responsible for," adds Green.

While there are certain income limits, many taxpayers are eligible to e-file for free directly with the IRS.

Plus, anyone can order an official transcript of their return from the IRS.  This shows what the tax preparer filed on your behalf.