Tax fraud is a situation where your personal information is stolen then used to gain more tax refunds from the Internal Revenue Service (IRS). When applying for a tax return online, ignorance of your information security may make you a victim of tax fraud. Therefore, whether you’ve already filed or are compiling the statements, you need to be alert to the possibility of tax fraud.
If you haven’t filed, and you are set to work with a tax preparer, ensure the tax preparer is someone you trust or the tax-return tool you use is reliable. If it’s the first time this year for you to work with someone, you need to do some research before committing. You can take recommendations from trusted family and friends to exclude those who will steal your personal information. Before working with any tax preparers, you need to check their valid tax preparer identification numbers and verify their status with the IRS directory.
Besides, if the preparers are coaxing you into something you don’t want, this might be a signal of tax fraud. What they are persuade you to do might includes signing a blank return, paying extra fees like a percentage of your refund amount, as well as depositing your refund into an account that belongs to someone else. Normally, tax preparer should not implicitly promise you a better refund than the previous year, or use your last pay check instead of your full W-2 form. If your preparer shows such suspicious actions, you need to be careful and consider whether it’s a tax fraud.