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NY Tax Commissioner Warns Taxpayers to Beware of Dishonest Tax Preparers
Acting New York State Commissioner of Taxation and Finance Barbara G. Billet advises New York State taxpayers to be cautious when selecting a preparer for their personal income tax returns, and to read the fine print carefully when a preparer offers an instant tax refund that it actually a loan.
As the mid-April filing deadline approaches, dishonest tax preparers lure unsuspecting taxpayers by promising to secure large deductions and refunds they are not eligible to receive. These returns are sometimes backed by fraudulent documentation.
But taxpayers are left holding the bag when the Department of Taxation and Finance and the Internal Revenue Service disallow the credits or deductions claimed by the preparer. The surprise is compounded when taxpayers learn they are responsible not only for the actual tax obligation, but also interest and penalties associated with the outstanding liability.
Acting Commissioner Billet also warned taxpayers to thoroughly review details of any refund anticipation loans their preparer may offer. While the promise of immediate cash is tempting, these short-term loans often carry an interest rate far in excess of loan rates offered by banks and credit unions. Coupled with associated fees, taxpayers may find much of their refund going to their tax preparer. Taxpayers wishing to receive their refund faster are encouraged to file electronically and to authorize direct deposit for their bank account.
Acting Commissioner Billet said, "The Department of Taxation and Finance is committed to administering an ethical, fair and safe tax system that protects New York's taxpayers. Every year we witness the introduction of new tax fraud schemes that seek to defraud both the Department and innocent taxpayers. Unsuspecting taxpayers are led to believe they are entitled to credits and deductions they do not qualify for and, in the end, they are left to pay the price long after the disreputable tax preparer has closed shop and moved on in search of their next victim. We can not stress enough how important it is to use a reputable and established preparer."
Many options exist for taxpayers to prepare their returns properly and with the confidence that the credits they claim, and the refunds anticipated, will be received. In addition to paid professional preparers, inexpensive software packages exist that will help prepare a return and notify taxpayers of credits for which they might be eligible. The Department of Taxation and Finance also plays a central role in the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs which field teams of trained and dedicated volunteers throughout New York's communities to assist taxpayers in meeting their obligations by filing timely and accurate returns. To find the closest VITA or TCE location, call 1- 800-829-1040.
For more information about filing you taxes, visit the Tax Department's website at www.nystaxgov or call 1-800- 225-5829.
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