www.CUNA.org/newsnow (2/18/10) Tax-filing season brings out tax-preparation frauds. The latest scheme, by individuals claiming to be tax preparers, involves tax refunds transmitted as a direct deposit or automated clearing house (ACH) credit.
The victims unwittingly provide the bogus tax preparers with personal information such as their name, Social Security number, bank account numbers, investment information and more so the preparers can complete the tax forms. The tax preparer inflates the information with fraudulent information to obtain a larger refund. Some victims have found their tax preparers have claimed children they don't have, day care expenses and so on.
The tax refunds are transmitted as a direct deposit (ACH credit) to a newly-created account or to an existing account with an impersonator added as a joint owner. These accounts are established by an impersonator or a recruiter. Once the tax refund is deposited into the account, the impersonator or recruiter withdraws the tax preparation fee. The remainder of the ACH credit goes to the refund recipient.
Last year the IRS prosecuted more than 200 people as phony tax preparers, said Seattle-based (Public News Service Feb. 17). The IRS is already busy checking up on new tax scams, ranging from filing false returns to convincing clients they don't need to pay income taxes.
Richard Panick, field media relations specialist with the IRS, warned consumers to be extra careful when a preparer bases the fee on a percentage of promised refund. Consumers should also avoid preparers who claim to know something special or that they can get more money than anyone else, Panick told the news service. Also, plan to sit with the preparers as they fill out the tax forms. Never just sign a blank form and trust them to file it, he said.
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