12 News DEFENDERS: Choosing a tax preparer - WAFF-TV: News, Weather and Sports for Huntsville, AL

12 News DEFENDERS: Choosing a tax preparer

MONTGOMERY, AL (WSFA) - Did you know that Montgomery ranks second in the country in terms of income tax fraud? After Miami, Florida, there are more complaints filed per capita in Montgomery than in any other city.

The numbers have attracted the attention of federal officials in Washington, not to mention the 12 News Defenders. Here's what you need to know to hold on to your cash.

It's not reputable tax preparers you have to worry about. H & R Block's Ashley Hale says it's the ones that make outrageous claims.

"I've heard people say that you can get $3,000 per child. That is not true," Hale said.

The IRS says watch out for tax preparers who make promises before they even look at your financial documents.

"I've heard someone say, 'I'll give you a thousand dollars just because you are in school,' said Hale. "That's not true either!"

Believe it or not, there are preparers out there who tell customers they know about "secret" deductions, "special refunds" only for African-Americans, and ways to "borrow" dependants from other people's returns.

All are warning signs for tax payers.

[ON THE WEB: New tax preparer regulations]

IRS officials suggest looking for a preparer who...

  • charges a flat fee (not a percentage of your refund)
  • is in business all year long (not just a few months during tax season)
  • is registered with the IRS and can show you a preparer tax identification number or PTIN.

"If you don't have your PTIN number, then you are not legit. Period," Hale advised.

Tax-related ID theft also on the rise.

And now, George Beck, the US Attorney for Alabama's middle district, says criminals are finding new ways to rip off tax payers.

More and more people are stealing social security numbers and birth dates and using the data to file false returns.

[ON THE WEB: Examples of Identity Theft Schemes]

Beck's office prosecuted dozens of such cases last year. And word of the increase has reached all the way to Washington.

"They're going to send more agents down here, more attorneys. We're going to have a special grand jury," Beck told WSFA 12 News. "So my advice is, do not file a false return."

To prevent someone from filing a false return in your name, remember to safeguard your personal information -- Shred documents before you throw them away and never give out your social security number just because someone asks.

[IRS VIDEO: Protect yourself from identity theft]

[IRS VIDEO: Are you already an identity theft victim?]

What happens if YOUR identity is stolen?

If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice.

A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490. 

The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.

Taxpayers looking for additional information can consult the special identity protection page on IRS.gov.

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