Better Business Bureau (BBB) urges consumers to be smart during tax identity theft awareness week
It’s that time of year again. Over the next few weeks, W-2 forms will show up at your work desk or in your mail. And while the thought of a hefty tax return could be a happy one, the consequences of filing your taxes the wrong way is not.
This week is Tax Identity Theft Awareness Week, and your Better Business Bureau serving Central, Coastal, Southwest Texas and the Permian Basin along with the Federal Trade Commission (FTC) encourages taxpayers to take time and use caution when selecting a tax preparer you can trust. It’s important to avoid mistakes that could result in additional fees, or even becoming a victim of tax identity theft. That happens when someone uses your Social Security number to get a tax refund, or even a job.
According to the FTC’s 2013 Consumer Sentinel Network Data Book, statistics show tax identity theft accounted for over 30 percent of all identity theft complaints.
According to the FTC, tax identity thieves get your personal information in a number of ways, including: going through your trash or mailbox; through emails asking for information, which appears to come from the IRS; employees at hospitals, nursing homes, banks and other businesses stealing data; and phony or dishonest tax preparers misusing confidential information or passing it along to identity thieves.
To lessen the chances of becoming a victim of tax identity theft, the FTC has the following advice:
- File your tax return early. Do it before identity thieves have a chance to steal your information.
- Use a secure internet connection.If you file your return electronically, don’t use unsecure, publicly available Wi-Fi hotspots.
- Shred documents. This includes copies of your tax return, drafts or calculation sheets you no longer need.
- Check your credit report.Do it at least once a year for free at annualcreditreport.com to make sure no other accounts have been opened in your name.
Additionally, BBB offers the following advice for taxpayers looking for a tax preparer:
- Get references and do your research.Get referrals from friends and family on who they use and check out the company first at bbb.org to see its BBB Business Review for details about complaints, customer reviews and any advertising-related concerns.
- Look for credentials.Ideally, your tax preparer should either be a certified public accountant, a tax attorney or an enrolled agent. All three can represent you before the IRS in all matters, including an audit.
- Don’t fall for the promise of a big refund.Be wary of any tax preparation service promising larger refunds than the competition. Avoid any tax preparer who bases their fee on a percentage of the refund.
- Think about accessibility.Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors, or in case of an audit, make sure you are able to contact you tax preparer at any time of the year.
- Read the contract carefully.Read tax preparation service contracts closely to ensure you understand issues such as how much it is going to cost for the service, how the cost will be affected if preparation is more complicated and time consuming than expected and whether the tax preparer will represent you in the case of an audit.