The New York State Department of Taxation and Finance and the Division of Consumer Protection today issued a consumer warning to the seven million taxpayers who have yet to file income tax returns.
“In light of the recent arrests of tax preparers across New York State, we’re urging taxpayers to ask the right questions before trusting someone with their private information,” said New York State Commissioner of Taxation and Finance Jerry Boone. “Each year, we receive thousands of tax returns based on stolen identities, some of which are submitted by unethical tax preparers. If you choose to hire a tax preparer, follow these easy steps to ensure that the preparer is honest and qualified.”
“The Division of Consumer Protection strongly urges all New Yorkers to practice due diligence when selecting a tax preparer,” said Acting NYS Secretary of State Rossana Rosado. “Always get the terms and total cost of the service in writing. Avoid any tax preparer who charges a percentage of your tax refund as part of the fee. Most important, if you suspect you’re being defrauded by a tax preparer, report that individual to the Tax Department immediately.”
Before you hire a tax preparer
While millions of New Yorkers prepare their taxes without the services of a paid tax preparer, the Tax Department and Division of Consumer Protection encourage taxpayers who are considering a paid preparer to ask these four questions:
Are you registered with the IRS and New York State? New York State registered preparers must meet continuing education requirements and minimum qualifications. Attorneys, certified public accountants, and IRS enrolled agents aren’t required to register but do have other professional requirements. Ask to see the preparer’s registration certificate or proof that he or she isn’t required to register. (You can also verify that a tax preparer is registered online.)
How much will it cost? Ask to see a list of fees. The fees should be directly related to the services provided and not the refund amount. Also, by law, preparers cannot charge to e-file in NYS.
How will I receive my refund? A refund should never be deposited into a preparer's bank account. The fastest and safest way to receive your refund is to have it directly deposited into your bank account.
Will you sign the return? A completed tax return must be signed by both the taxpayer and the preparer. Preparers must also include their federal preparer tax identification number (PTIN) or social security number, and either their NYS registration number or exclusion code. You should never hire a preparer who won’t sign your return, and never sign a return before it’s fully prepared.
Taxpayers should also ensure that the preparer will: base the tax return on actual records and receipts; e-file the return; and be available after the tax return is filed in case questions arise.
Taxpayers can also contact the Better Business Bureau to see whether a tax preparer has a history of consumer complaints.
New York is one of only four states to regulate the tax preparer industry. While most tax preparers are honest and provide excellent service to their clients, taxpayers must remain vigilant to protect themselves from individuals who file fraudulent returns or misuse personal information.
New webpage and checklist for taxpayers
To help taxpayers screen potential tax preparers, the Tax Department published a new checklist available at its Tips for hiring a tax preparer webpage. Before hiring a tax preparer, use the checklist as a guideline when visiting or calling prospective preparers.
File a complaint
If you're aware of a tax preparer who has engaged in illegal or improper conduct, contact the NYS Tax Department’s Office of Professional Responsibility at (518) 530-HELP (option #2) or file a tax preparer complaint online. The Tax Department will review your complaint promptly and, where appropriate, take corrective action, which may include sanctions.
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