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Westchester Consumers Given Tax Fraud Tips

WESTCHESTER, N.Y. – Tax season is in full swing and as Westchester residents gather their receipts, W-2s and 1040EZ’s, so gathers another crop of crooks looking to take personal information and use whatever credit is available for their personal gain.

“Any cold unsolicited call should be ignored,” said John Gaccione, commissioner of Westchester County’s Department of Consumer Protection . “If they’re calling asking for your social security number or your birthday they’re really interested in stealing your identity.”

New York State Attorney General Eric Schneiderman said IRS impersonation schemes tend to flourish this time of year, praying primarily on college students and the elderly. In a release Wednesday, the AG's office said it logged multiple complaints about “spoofing” technology, used phishing phone calls. This creates a false caller ID, which a criminal could use to impersonate the IRS .

Schneiderman and Gaccione warn consumers to use reputable tax preparation services. Consumers can check a business' reputation through the Better Business Bureau . "Financial Services," says the Bureau, were the number one area of consumer complaints in 2010.

Consumers should also beware of tax preparation services which advertise low fees and then tack on additional charges once the return is finished. These companies often say the return was more complicated than the return service advertised.

Some tax prep companies prey on desperation for additional fees, using Refund Anticipation Loans (RALs) and Refund Anticipation Checks (RACs) as ways to collect interest and fees, officials warn. RALs are often marketed as "instant" or "24-hour" refunds but are actually high cost loans that come with fees and interest that reduce the amount of any refund. New York law, known as the Consumer Bill of Rights regarding Tax Preparers , requires RALs to be marketed as loans not refunds. RACs are temporary bank accounts established on behalf of a taxpayer into which a direct deposit refund can be received but these also come with fees that will reduce a consumer's refund.

“Tax season is stressful enough as it is,” said Schneiderman. “The last thing New Yorkers need to worry about is having their identities stolen by unscrupulous scammers. While there are plenty of legitimate and law-abiding tax preparers doing business, there are some who use the allure of fast cash to take advantage of unsuspecting consumers.”

Some consumers may qualify for free tax preparation help through Volunteer Income Tax Assistance . Those whose income is $57,000 or less may qualify for FreeFile and can use free tax preparation and free e-filing software.

Schneiderman is urging New Yorkers to be vigilant consumers and to report instances of fraud to his office. Consumers who feel they've been victims of any tax preparation scams are urged to contact the Attorney General's Office at (800) 771-7755.

They also provided the following tips to keep your money and identity safe:

  • Use recognizable and established companies
  • Check the tax preparer's qualifications
  • Check the tax preparer's history through the Better Business Bureau
  • Check for disciplinary actions and verify licenses
  • Find out about disclosed and undisclosed service fees
  • Avoid those who base their fees on a percentage of your refund
  • Make sure the tax preparer is accessible, even after the April due date
  • Never sign a blank return
  • Review entire return before signing
  • Make sure the preparer signs the tax form and includes a Preparer Tax Identification Number (PTIN)
  • Check out free informational services from your local government and online
  • Avoid "too good to be true" promises
  • Consult New York's "Consumer Bill of Rights Regarding Tax Preparers"

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