Caution – The Promise of a Large Tax Refund May Be a Scam

INDIANAPOLIS – The Indiana Department of Revenue (DOR) is advising Hoosiers to be leery of so-called tax preparers promising larger than expected tax refunds.

The promise of a large tax refund is often publicized by scam artists claiming to be legitimate tax preparers to encourage unsuspecting victims to file taxes using their services. These scammers use flyers, advertisements, phony store fronts and presentations to lure victims into using their services.

These con artists frequently target older, low-income and/or non-English speaking Hoosiers who may not have a tax filing requirement. In addition, these con artists target individuals who are due a state and/or federal tax refund by promising a larger, but unjust refund based on fake Social Security benefits and false claims for education credits or the Earned Income Tax Credit (EITC). Once they have a customer’s information, they file a false return in the customer’s name and keep the refund.

“It is imperative customers check on their tax preparers to ensure they are reputable,” advised DOR Commissioner Adam Krupp. “Any promise of a larger than expected refund or encouragement to claim credits the customer is not entitled to, should alert the customer to possible illegitimate actions and result in choosing a different tax preparer.”

Another way criminals claim falsely inflated refunds is through filing phony W-2 or 1099 forms. These self-prepared or “corrected” forms report taxable income as zero, leading to large refunds. Remember, a legitimate tax preparer will never suggest filing incorrect forms.

DOR offers several tips for customers when selecting a tax preparer:

  • Avoid fly-by-night tax preparers. Make sure the preparer you select will be available well after the return is filed.  In the event that questions come up about the return, a reputable tax preparer should be available to assist.
  • Check on tax preparer’s qualifications. The tax preparer must have an IRS PTIN to charge for preparing tax returns. The IRS also has a Directory or Federal Tax Return Preparers with Credentials and Select Qualifications that can be accessed on their website at https://irs.treasury.gov/rpo/rpo.jsf.
  • Check the preparer’s history. The Better Business Bureau, State Board of Accountancy and State Bar Association are great options to access the tax preparer’s history.
  • Never sign a blank return. Any tax preparer that asks a client to sign a return before it is complete, should be avoided. Review your return to ensure everything is correct and that the refund goes directly to you, not the preparer. Reviewing the routing and bank account number can help ensure your refund is going to the correct account.

If an individual thinks they have come across a corrupt tax preparer, they can report it to the IRS or DOR at:

About Brian Scott

I play on the radio from 7 am -1 pm weekdays on 98.9 WYRZ and WYRZ.org. Follow me on twitter @WYRZBrianScott or e-mail me at brian@wyrz.org.

Check Also

Central Indiana Community Foundation Celebrates OrthoIndy Foundation $10 Million Grant Milestone

Indianapolis, IN – Central Indiana Community Foundation (CICF) is thrilled to congratulate OrthoIndy Foundation, a …

Leave a Reply

Your email address will not be published. Required fields are marked *