For many Americans, tax-filing is a bit like going to the dentist. Some put it off as long as they can. Like an ignored dental issue, pain can be the result. In the case of a late filing of Federal Income Taxes, that pain might come in the form of a notification from the IRS that your taxes have already been filed using your name and your Social Security number. For those who have been victimized by identity thieves in this way, the pain has only just begun. Now comes a lengthy process of trying to correct the problem that some anonymous thief has caused.
Your Better Business Bureau (BBB) has a better idea: file your Federal Income Taxes early. That means as soon as you get your W-2 or your 1099 forms, get on it. Do it before that identity thief has a chance to create a cavity in your finances. Here’s BBB’s advice for a good checkup from the IRS:
• Do a thorough examination of the forms sent from employers. Be sure the information is correct. Pay careful attention to the Social Security number and to the spelling of your name.
• January 31 is the legal deadline for employers to get your forms to you. Any delay should be checked out immediately, first with the employer and then with the IRS. Check into using Form 4852 which is a substitute for Form W-2.
• Don’t delay in response to an IRS notification of a duplicate return. This is serious business and must be addressed as soon as possible.
• Watch out for an IRS notice saying you’ve received wages from somewhere you know you did not work.
• Also watch for an IRS notice saying, “you owe additional tax, refund offset or have had collection actions taken against you for a year you did not file a tax return.” If you get one, immediately contact the IRS for more information.
• Your Social Security number is like the combination to a safe containing all of your money. Never give it out without knowing that person is legitimate.
Checking up on tax preparers
Many people rely on tax preparers and BBB gets many complaints about some of those tax preparers. It’s vital when selecting someone to do your taxes for you that you:
• Check them at bbb.org and by doing your own online research on them.
• Consider using referrals from trusted friends and family.
• Know if the preparer has an area of expertise. Ask about their background and credentials.
• Get an estimate and ask how they determine their fee.
• Never select a preparer who says they base their fee on the amount of your refund.
• Know that an immediate payment of your refund from the preparer is really just a loan. Find out all terms and conditions.
• Know whether they will represent you if audited and what extra they might charge for that.
• Find out if they can be reached throughout the year.
• Ask if their work, including math and tax rule interpretation, is double checked.
• Ask if they have expert knowledge applicable to your own circumstances, especially if you are self-employed or a business owner.
Serious issues with the IRS should be avoided like a root canal. The above precautions can give you a healthy checkup. More questions? Contact your BBB at 800-856-2417 or online at bbb.org.