Beware Dishonest Tax Preparers
New York State taxpayers are advised to be cautious when selecting a preparer for their personal tax returns, and to read the fine print carefully when a preparer offers an instant tax refund, says acting New York State Commissioner of Taxation and Finance, Barbara G. Billet.
As the mid-April filing deadline approaches, dishonest tax preparers lure unsuspecting taxpayers by promising to secure large deductions and refunds they are not eligible to receive, according to Billet. These returns are sometimes backed by fraudulent documentation. Taxpayers are left "holding the bag" when the Department of Taxation and Finance and the Internal Revenue Service (IRS) disallow credits or deductions claimed by the preparer. The surprise is doubled when taxpayers learn they are responsible not only for the actual tax obligation, but also interest and penalties associated with the outstanding liability.
"The Department of Taxation and Finance is committed to administering an ethical, fair and safe tax system that protects New York's taxpayers," said Billet. "Every year we witness the introduction of new tax fraud schemes that seek to defraud both the Department and innocent taxpayers. We cannot stress enough how important it is to use a reputable and established preparer."
Billet also warned taxpayers to thoroughly review details of any refund anticipation loans their preparer may offer. While the promise of immediate cash is tempting, these short term loans often carry an interest rate in excess of loan rates offered by banks and credit unions. Coupled with associated fees, taxpayers may find much of their refund going to their tax preparer.
Taxpayers wishing to receive their refund faster are encouraged to file electronically and to authorize direct deposit for their bank account.
Many options exist for taxpayers to prepare their returns properly. In addition to paid, professional preparers, inexpensive software packages exist that will help prepare a return.
The Department of Taxation and Finance plays a central role in the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs, with field teams trained and dedicated to assist taxpayers in meeting their tax obligations throughout New York.
To find the closest VITA or TCE location, call 1-800-829-1040. For more information about filing taxes, visit the Tax Department's website at www.nystax.gov or call 1-800-225-5829.