With just a month left until the annual tax filing deadline, Illinois’ attorney general is warning residents to be wary of potential scams when hiring anyone to prepare their documents.
Attorney General Kwame Raoul on Friday urged Illinoisians to take precautions before hiring a tax preparation business amid consumer complaints that some of these organizations have either refused or failed to provide copies of completed tax return forms and filings.
“Many Illinois residents are feeling the financial impact of the COVID-19 pandemic, so it is even more important to be aware of tax preparation scams and individuals who attempt to steal tax refunds or information to commit identity theft and fraud,” Raoul said in a statement. “I encourage tax filers to exercise vigilance by protecting their information and ensuring that tax preparers are reliable before providing any information. Contact the Attorney General’s office to report fraudulent tax preparers or other tax scams.”
The attorney general is also cautioning residents to watch out for businesses that charge unexplained fees and avoid costly refund anticipation products, which can be deceptively marketed as being “interest free,” when they’re really short-term loans with high interest rates and additional fees.
According to Raoul, residents should avoid tax preparers who:
— Fail or refuse to provide access to their electronic documents.
— Ask you to sign a blank or incomplete tax form.
— Offer to e-file a tax return using a pay stub instead of a federal W-2 form. Doing so is a violation of IRS e-file rules.
— Base preparation fees on a percentage of the tax refund. You should obtain the full cost of tax preparation services before signing a contract, and pay upfront if you are able to do so.
— Guarantee bigger refunds than their competition. Scam preparers often mislead consumers into taking deductions they are not entitled to claim. They also invent income that erroneously qualifies consumers for tax credits.
— Require payments in cash only and do not provide a receipt.
— Direct refunds into the preparer’s bank accounts.
— Mark returns as “self-prepared,” or affix a business label rather than sign the form by name.
— Refuse or fail to provide a Preparer Tax Identification Number (PTIN). Anyone paid to prepare or assist in preparing federal tax returns is required by law to have a valid PTIN. Visit the IRS’ online directory of federal tax return preparers to verify preparers’ credentials.
The tax filing deadline is April 15.
Raoul said anyone seeking out a tax preparer should first check the group’s qualifications through a free IRS File Online Lookup Tool.
Anyone looking to file a tax-related complaint can do so through the Attorney General’s website or by calling one of three consumer fraud hotlines: 1-800-386-5438 (Chicago), 1-800-243-0618 (Springfield), 1-800-243-0607 (Carbondale).