February 26, 2019 Herb 0Comment

IRS Scams

It’s tax season so don’t fall victim to unethical tax preparers.  Towards the end of the second full week of the 2019 tax filing season, the Internal Revenue Service (IRS) warns taxpayers to avoid unethical tax return preparers, called “ghost preparers”.

According to the IRS, by law, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid 2019 Preparer Tax Identification Number, or PTIN. Paid preparers must sign the return and include their PTIN.

 Watch out for “Ghost” Tax Preparers

But ‘ghost’ preparers do not sign the return, only printing the return and telling their taxpayer client to sign and mail it to the IRS. Or, for e-filed returns, they prepare but refuse to digitally sign it as the paid preparer.

The IRS says that other tax preparation schemes, dishonest and unscrupulous ghost tax return preparers look to make a quick buck by promising a big refund or charging fees based on a percentage of the refund.

Ghost tax return preparers may also require payment in cash only and not provide a receipt. They also invent income to erroneously qualify their clients for tax credits or claim fake deductions to boost their refunds. Or they may direct refunds into their own bank account rather than the taxpayer’s account.

The IRS warns taxpayers to review their tax return carefully before signing and ask questions if something is not clear. And for any direct deposit refund, taxpayers should make sure both the routing and bank account number on the completed tax return are correct.

For tips on choosing a tax return preparer widely, go to www.irs.gov/tax-professionals/choosing-a-tax-professional.  For details about tax preparer credentials and qualifications go to www.irs.gov/tax-professionals/understanding-tax-return-preparer-credentials-and-qualifications.

Watch Out for Calls Demanding Unpaid taxes

New Jersey’s Division of Taxation (NJDoT), says the state relies primarily on the mail to make the first contact with individuals about unpaid taxes. “In most cases, the tax collection process will escalate only if you do not respond appropriately to mailed notices. If you have not received a notice in the mail and someone calls or emails you saying you owe New Jersey taxes, there’s a good chance that a scammer has targeted you, says NJDoT.

Beware and be suspicious if someone calls demanding immediate payment for tax debt, threatens you with police action for not paying your taxes or demands that you make a payment with a prepaid debit card.

You can confirm the Division is trying to contact you by calling the main Customer Service Center phone number 609-292-6400, Monday, Tuesday, Thursday and Friday from 8:30 a.m. until 4:30 p.m. (10 a.m. to 5:30 p.m. on Wednesdays). Don’t give out or confirm financial or other personal financial information, including your bank account, credit card, or Social Security number, unless you know with whom you are dealing.

Check out the AARP Fraud Network for tools and resources to detect the latest scams and a hotline to report the ones you receive.  Go to www.aarp.org/money/scams-fraud/.

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