AARP warns of tax scam

Published 10:00 am Thursday, February 23, 2023

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Since the start of the COVID-19 epidemic, tax-related identify theft has increased by 45%, says Linda Williams, community outreach and training manager for Consumer Action.

One type of tax scam is preparer fraud. The criminals set up shop as expert tax preparers and promise big refunds. For a fee, they fill out a return filled with trumped-up tax deductions and credits, with your name on the return. When the refund rolls in, it will go to their own bank accounts. By the time you come looking for them, they’ll be long gone.

SOME WARNING SIGNS

• They refuse to sign the return or enter a Preparer Taxpayer Identification Number. The Internal Revenue Service (IRS) requires both if someone else prepares your return. The IRS will initially assume that it’s you who attempted tax fraud.

• They base their charges on a percentage of your refund.

• They ask you to sign a blank or incomplete tax form.

• They file the return without allowing you to review it.