HOUSTON – Tax Day is coming up fast and the warnings about tax season started going out months ago. The Treasury Department gave us a heads up that this tax season is going to be frustrating. There are some things you need to know before hiring a tax pro for help.
With child tax credits and stimulus refunds, you may need help figuring out your taxes this year. Mom and pop offices pop up this time of year, and you should know the red flags to look out for.
Red flag #1 - They don’t give you a price upfront
The first sign something isn’t right - is the promise of a bigger refund and they don’t give you a price upfront.
“If tax preparer tells you that, well, it depends if you’re getting a refund, or how much your refund is going to be that is a big red flag, because usually what they’re gonna do is inflate the information. So your refund looks bigger. But at the end of the day, they’re looking forward to taking a big chunk of that,” said Cristina Cave with BakerRipley.
BakerRipley runs 10+ neighborhood tax centers around town. Cristina Cave told us they often see clients who have tried other places.
When it comes to fees, Cave said often these fraudulent tax preparers wait until they see how much money you will get before setting a price. They may also add false information in order to make your refund look bigger than it actually is. Watch out, because you could be on the hook for mistakes sent to the IRS.
“The information they’re sending to the IRS may be wrong. You may not be aware, but they’re potentially committing fraud,” said Cave. “At the end of the day, the taxpayer is the one signing the tax return and you are the one that has to answer to the IRS. So big red flag on that.”
Cave said you should never pay for add-ons like “guarantees” or refund insurance.
Red flag #2 - Asks you to sign without reviewing it or rushes signing
Another common red flag that a tax preparer doesn’t have your best interest at heart is they ask you to sign something without reviewing it. You should check over every detail, like social security numbers and dates of birth.
Make sure the bank routing number is yours. A shady tax preparer may put their own bank information. They may even tell you the money needs to go to their account so they can take fees and send you the rest. Once a tax refund is submitted to the IRS, you can’t change the funding option.
No matter what, Cave said don’t ever sign a blank form.
“Some of the tax preparers that are maybe putting the excuse that they’re having some issues with the system or so and say that they cannot print or give you a copy of your tax return. Or, that you need to sign a blank tax return or even a blank document. And they will go ahead and send it later, the red flag,” said Cave.
Red flag #3 - Office suddenly opens in random location
One big red flag that a tax preparer is not trustworthy is they set up shop for just a few weeks and then disappear.
“Unfortunately, some of those unethical tax preparers are really embedded in the communities, you know, they really know where to go. And also they know when to do it just during tax season because right after tax day, they are long gone. And if you have an issue, you are left alone, you don’t know where to go. So that is also one thing you should need to check. If you go and look for a tax preparer. Make sure that they’re gonna be there after tax season,” explained Cave.
You can see if a tax preparer is registered by checking the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications site.
You can search for credentials and see reviews from other people. There’s also a place to submit a complaint about someone.
How can I get my tax refund money fast?
- The IRS said the quickest way to get your refund is to e-file with direct deposit.
- Within two days you should be able to track the status on the IRS website.
- The average turnaround time is 21 days.
The free BakerRipley tax help is for those making less than $58,000 a year. For those who made less than $73,000, the IRS offers free file. We’ve also rounded up other places around town that offer free tax help. Tax deadline day is April 18th.
