Some consumer tips to help avoid excessive fees or potential fraud when using paid tax preparers, according to the Justice Department, Internal Revenue Service and the Consumer Financial Protection Bureau:
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- Make sure your tax preparer is registered. Every tax preparer in New York State must be registered with the New York State Department of Taxation and Finance. Call 311 to see if the business you’re using has received any complaints.
- Know Your Rights. Tax preparers must post their qualifications, fees, and whether or not they will represent you at a government audit. Preparers must sign every tax return, and provide customers with a copy of your tax returns and an itemized receipt or statement for your service. Never sign a tax return that is blank, incomplete, or filled out in pencil. It could be changed later. Tax preparers are required by law to give each customer a free, current, and legible copy of the Consumer Bill of Rights Regarding Tax Preparers (available in español (Spanish), عربي (Arabic), বাংলা (Bengali), 中文 (Chinese), Kreyòl Ayisyen (Haitian-Creole), 한국어 (Korean) and Русский (Russian) before any discussions with a consumer.
- Ask for an estimate and compare your itemized receipt or statement to the posted prices. Consumers have the right to ask for an estimate before having their taxes prepared. Tax preparers may not charge you fees based on the amount of taxes you owe or your anticipated refund.
- Avoid Refund “Advances” or “Checks.” Some preparers advertise “refund advances” that are “free” and deducted from your refund but be sure to check the fine print and look for any fees. Ask for the price with and without the advance and compare prices of other preparers to make sure the price isn’t higher because of the advance. If you have a bank account and file your taxes electronically, you can arrange for direct deposit of your refund.
- Read the fine print about prepaid and gift cards. Some preparers offer to put some or all of your refund on a prepaid or gift card. Be sure to check how much you will be charged for this option. Also, know the fees associated with using, not using (dormancy) or reloading the card, if it has an expiration date and what happens if the card is lost.
- File for free! If you earned $64,000 or less, you can file your taxes for free. Visit nyc.gov/taxprep or call 311 for more information.
- File a complaint with DCA. Call 311 or visit nyc.gov/dca to file a complaint about a tax preparer.
- If you have a disability or are a limited English speaker. If so, you are eligible for free tax preparation services at a Volunteer Income Tax Assistance location: http://irs.treasury.gov/freetaxprep/ or call 800-906-9887. Persons 60 or older can get free assistance through Tax Counseling for the Elderly: http://www.aarp.org/applications/VMISLocator/searchTaxAideLocations.action or call 888-227-7669.
Via the NYC Department of Consumer Affairs (DCA) for more information call 311 or visit DCA at nyc.gov/dca