Banklady.com Offers Tips to Secure Legitimate Tax Preparation Services

(Dallas, TX) February 24, 2005 — In order to aid with the daunting yearly exercise of tax preparation, Banklady.com, an online financial referral service, has compiled a list of suggestions to help filers avoid tax scam artists and hire a trustworthy tax professional to prepare and file tax returns legally. Keeping up with the ever-changing list of real and bogus deductions and how they do or do not apply personally can be equally daunting. The following list includes several helpful points to remain on top of the game and come out ahead during tax season.

*You and Your Tax Return
Remember that your tax return is all about you and so are any mistakes, miscalculations, misinterpretations, misrepresentations, and the resulting penalties and additional tax, if any, no matter who does the preparing. Make sure that you and your tax preparer are on the same page philosophically. Beware if he or she encourages you to overstate your business or personal expenses, exemptions or other deductions.

*Select a Credentialed Preparer
Unless you have the good fortune of a personal recommendation from a trusted friend, you will have to take it upon yourself to determine the qualifications, as well as the ethics, of any prospective preparer. Treat it like an employment interview. If the candidate refuses an in-person meeting, is unable to provide references or proof that he has taken the appropriate tax preparation courses, chances are he’s less than legit. Look for the designations of certified public accountant, enrolled agent or tax attorney. These professionals are required to stay current with changes in the tax laws and they are permitted to represent taxpayers before the IRS in audits, collection actions and appeals.

*Fee-based Refund Claims
Scam artists and con men are rampant at tax time, ready to swindle unwary victims in all income brackets, claiming that, for a fee, they can get you more deductions and a bigger refund. A forthright tax preparer would never make such claims before reviewing all the facts. If your tax preparer’s fee is based on a percentage of your refund, run like the wind. Reputable professionals charge by the hour or according to the number of forms completed as part of the return and they make these policies clear from the beginning.

*Tax Payer Identity Theft
Identity theft is a term we’ve heard a lot lately and it rears its ugly head most prominently during tax season. Never sign a blank form and never sign a draft form in pencil. Don’t give your Social Security number to a would-be tax preparer until you have thoroughly checked him out. Some are looking to gain more from you than a tax preparation fee.

*"Un-Tax" and Other Schemes
In other schemes, a caller or an Internet ad will offer to "un-tax you for $49.95," claiming that paying taxes is voluntary. The IRS reports that hundreds of people have been taken in by this ruse and later prosecuted for breaking the law. Refund of Social Security taxes is another hoax with absolutely no factual basis. The taxpayer agrees to pay an up-front "paperwork" fee of $100 plus a percentage of the refund. The scammer then disappears with the victim’s hundred bucks and his bogus claim is, of course, denied. Several years ago, the number one scheme on the IRS' "Dirty Dozen" list was a scam citing a law that supposedly provided reparation for slavery. Thousands of hopeful African-Americans paid to have these claims filed on their behalf, only to learn there is no such provision in tax law and taxpayers who file these claims can face up to $500 in penalties if they don’t withdraw the claim.

*Offshore Accounts
Some taxpayers are led to believe that by transferring assets into trusts or offshore accounts, they can reduce or eliminate taxes. Not so. Such schemes are certain to come under the very close scrutiny of the IRS and prosecution will follow, where appropriate

*"Claim of Right" Scheme
New to the “Dirty Dozen” list this year is the "Claim of Right" deduction scheme where taxpayers attempt to take a deduction equal to their wages, claiming it as a "necessary expense for the production of income." There is no basis for such a claim. Proponents have grossly misinterpreted the Internal Revenue Code.

This information represents the tip of the proverbial iceberg in tax preparation and awareness. A reputable tax professional is qualified to sort all the information out and stay on top of current tax law.

About Banklady.com
Banklady.com has been an online financial referral service since 2001, offering help and consumer tools for financial awareness. For more information about personal finances including bad credit loans, debt consolidation, tax tips, and mortgagss visit www.banklady.com.

Contact:
Destry Sanders
972-248-7961
www.banklady.com

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