How to avoid tax preparation fraud

Know your rights when working with a tax preparer in NYC, to avoid being ripped off. Here’s what you are entitled to before, during and after somebody helps you with your Federal, State and City filings:

NYC Consumer protection laws require tax preparers to sign every return with their true business names, provide you with a copy of each return, give you an itemized bill, return all personal papers and documents, and provide representation at any audit if that service has been promised.

Also important, a tax preparer must tell you up front whether he or she is NOT an attorney or CPA specially trained in tax law.

Also, NYC tax preparers may not reveal any details of your return to anybody you do not authorize, or alter any entries, after you have signed the tax forms.

Plus, tax preparers are required by law to give you a current legible copy of the Consumer Bill of Rights Regarding Tax Preparers for free before they begin discussing tax preparations. If you aren’t offered the document, or if the tax preparer says there’s a charge for the document, take your business elsewhere.

Download the NYC Dept. of Consumer Affairs Bill of Rights here.

Note that NYC tax prep consumer rights documents are available in Spanish, Chinese, Haitian Creole and other languages.

One of the top complaints about tax preparers is misleading filers about a Refund Anticipation Loan (RAL).  This is NOT a tax refund, but rather a high-interest loan against an anticipated tax refund. By law, any advertisement for a RAL must state that it is a loan, that the lender will charge a fee or interest, and it must identify the lender. Contact the NYC Dept. of Consumer Affairs with any complaints about tax preparers, including over-charging for services, mis-repesenting themselves as tax experts, or not disclosing legally required information about RALs.