Beware of fraudulent tax preparation services which will scam you out of your hard-earned money. Watch out for tax preparers who misrepresent their qualifications, illegally advertise refunds, and other consumer abuses. Here’s how to protect yourself against tax frauds —
Avoid “Instant,” “Rapid,” “Express” or “Fast Cash” refunds — “Instant” refunds are actually loans with extremely high interest rates known as refund anticipation loans (RALs). RALs must be repaid even if you don’t get your refund or it is smaller than you expected. If you have a bank account and file your taxes electronically, you can arrange for direct deposit of your refund in as little eight days. Ask your tax preparer about this option.
Know Your Rights — New York City consumer regulations require that tax preparers must post their qualifications, fees and charges, and whether or not they will represent you at a government audit. Preparers must sign every tax return, and provide you with a copy of your tax return and a receipt for your services.
Protect Yourself — Tax preparers may not charge fees based on the amount of taxes you owe or your anticipated refund. Never sign a tax return that is blank, incomplete, or filled out in pencil, since it could be changed later. Tax preparers are required by NYC law to give each customer a free, current, and legible copy of the Consumer Bill of Rights Regarding Tax Preparers before any discussions with a consumer.
Don’t pay cash — Never mail cash when paying your taxes. Pay by check or money order only.