Money Fix: Tax-preparation scams

Keep an eye on who is preparing your

Keep an eye on who is preparing your tax returns and what you are being promised, the experts say. (Credit: iStock)

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It's bad enough that you might owe Uncle Sam when your tax return is prepared, but if you're not careful, you could also get swindled during tax season.

The IRS has a new Dirty Dozen list of scams that pop up particularly now, such as identity theft, phone scams, phishing, false promises of "free money," and return-preparer fraud. The complete list is at irs.gov.

PROTECT YOURSELF. In many cases, an identity thief uses a legitimate taxpayer's identity to fraudulently file a tax return and claim a refund. Always protect your Social Security number and date of birth. Keep documents safe. If storing information electronically, make sure it is password-protected or encrypted.

IT'S NOT UNCLE SAM. A caller may say you owe money -- some even threaten arrest or revocation of your driver's license -- or tell you you're entitled to a large refund. Report the incident to the Treasury Inspector General for Tax Administration at 800-366-4484.

"The IRS will never contact you by phone or email, only by mail. If you receive an email, even if it has a fancy, but 'copied' IRS logo, delete it and contact the IRS," says Amiram Bielory, partner with accounting firm ParenteBeard in Manhattan.

CHOOSE HELP CAREFULLY. Avoid companies offering money up front for your refund. These are typically either a scam, or they carry a high interest rate, warns Bill Demaree, founder of Demaree Retirement Services in Indianapolis. Be wary of any tax professional who won't sign the return or include his ID number in any filings.

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