With Tax Season Coming, Beware of Tax Refund Scams

By KBJR News 1

With Tax Season Coming, Beware of Tax Refund Scams

December 10, 2012 Updated Dec 10, 2012 at 11:50 AM CDT

Madison, WI (NNCNOW.COM) -- It's a time when people start to receive their W-2 forms, file tax returns and await tax refunds. With tax season coming, fraudsters may know that people are looking forward to tax refunds and will use that knowledge to steal refunds and trick consumers into giving up personal financial information.

With many tax preparation services and lenders that legitimately help people file tax returns, there are others that may hide their true purpose and get personal financial information under false premises or file tax returns without consent and keep all or part of any refund, says The Wisconsin Department of Agriculture, Trade & Consumer Protection.

In one version, taxpayers who thought they were applying for a short-term loan at a tax preparation business were surprised to learn that the company, without their consent, had filed a return on their behalf.

The company then charged exorbitant fees, which it took from the taxpayers' refunds.

The DATCP is asking consumers to notify the state when they see questionable practices.

The Department of Revenue's mission is to process state tax returns accurately and as quickly as possible. The fradulent tax preparers slow down the processing of returns and can delay refunds for Wisconsin taxpayers.

Some tips to avoid becoming a victim of tax preparation fraud:

- Be careful of providing personal financial information to a tax preparation business unless you want the preparer to file your taxes. Make sure to provide clear direction and that the preparer advises to file a tax return on your behalf.

- Never sign an authorization permitting a company to file your taxes if you do not want the company to do so.

- Never sign a document without first reading and understanding what it says.

- Always insist upon receiving copies of all documents you are required to sign, or which identify the terms of a transaction and the charges you will be required to pay. Confirm before signing that you will receive copies. If a business does not agree to sign copies, don't sign.

- Before choosing a tax preparer, do research and try to get references from other clients.

- Be alert to promotions such as 'holiday loans' or other short-term loans that can be used to gain the personal financial information needed to file an individual's tax return.

Posted to the web by Jenna Vogt