Consumer Alert
01/31/2008



McCollum: Beware Fraudulent Tax Preparation "Experts," Offers

~ As tax season approaches, consumers should be wary of tax return scams, unscrupulous “preparers” ~

TALLAHASSEE, FL – Attorney General Bill McCollum today issued a consumer advisory warning Floridians to be wary of any tax-related scams as tax season rapidly approaches. The Attorney General noted that his fraud hotline frequently receives complaints from consumers who complain they have been misled scammed by fraudulent tax preparers without proper training or who deliberately mislead consumers about their credibility. Other schemes, including identity theft and blatant fraud, are also common.

“With tax season upon us, Floridians need to make sure they are not being taken advantage of when they are trying to file quickly and accurately,” said Attorney General McCollum.

To avoid being scammed by a non-legitimate tax preparer, consumers should get the credentials of the tax preparer and ask if they belong to a state board or bar association that requires them to receive continuing education. The Attorney General’s Office also recommends that consumers ask if the business is open year-round and notes that temporary employees or businesses should raise a red flag. The Attorney General’s fraud hotline, 1-866-966-7226, is also available to check companies’ complaint histories.

When choosing a tax preparation service, consumers should ask about service fees and avoid tax preparers who claim they can obtain larger refunds than anyone else. Consumers are also cautioned about taking out “Refund Anticipation Loans,” as the fees will still be required even if the loan is not approved. Additionally, the Attorney General reminded consumers that the processing time for an electronic filing is usually ten days and the refund is almost always directly deposited into the consumer’s bank account at no cost. Consumers should not feel pressured to pay extra fees to someone who claims they can get the refund a few days faster and should ask themselves whether the use of their refund anticipation loan for a few days would be worth fees that can equate to 180 percent APR.

The Attorney General’s Office also recommends that consumers shop around for quotes and ask the tax preparers if they will represent consumers who are audited or pay any audit-related fees. Only attorneys, certified public accountants and enrolled agents can represent taxpayers before the IRS in any matter including audits, collections and appeals.

One of the more common scams associated with tax season is “phishing,” which can occur when individuals pose as Internal Revenue Service (IRS) representatives and send consumers e-mails seeking personal information, allegedly for the purpose of processing refunds. The emails are usually created to look official and may include subject lines that read “Refund Notice” or similarly misleading phrases. The Attorney General reminded consumers that the IRS does not send e-mails asking for personal information to process refunds. Consumers can visit the agency’s website at http://www.IRS.gov and click on “Where’s My Refund” to check on the status of their refunds.

Another scheme which often surfaces during tax season is fraudulent charities which email consumers seeking contributions they claim can be written off as tax-deductible. Also common are Social Security refund scams which are based on offers of social security tax refunds, even though no such refund exists. The Attorney General’s Economic Crimes Division has investigated many of these complaints in the past and offers the following advice for consumers as they begin to prepare their tax returns for 2007:

- Consumers should never allow anyone purporting to be an agent for the IRS into their home unless he or she has proper identification.

- Never give out personal identification information to anyone who is soliciting money.

- Do not respond to e-mails asking for information relating to refunds. The IRS’s website is the legitimate source for checking on refund status.

Consumers may file complaints about tax-related scams and any other types of fraud by calling the Attorney General’s fraud hotline, 1-866-966-7226, or by filing a complaint online at: http://www.myfloridalegal.com.