SACRAMENTO, Calif., Feb. 1 -- It happens every year like clockwork. Seasonal tax preparers surface overnight with promises of huge refunds for a small fee. Their target: Low income taxpayers.
"No preparer in the world can guarantee you a refund," says Bill Geideman, Chairman of the California Tax Education Council (CTEC). "People tend to blame their tax preparers if they owe money and congratulate them if they get a refund. The tax preparers have nothing to do with it."
Another common scam involves false claims on Earned Income Credit. The preparer will increase the number of dependents on a tax form to guarantee a large refund. The taxpayer remains unaware of the phony claim until the IRS catches the error. By then, the tax preparer is long gone and the victim is responsible for paying the damages.
It sounds scary, but there are warning signs your tax preparer is not following the law:The preparer promises you a refund and offers to complete your return for a percentage of it. -- The preparer asks you to sign a blank tax return. -- The preparer refuses to sign your tax return after receiving payment for services. -- The preparer does not provide a copy of the return.
An estimated 10,000 people are illegally preparing tax returns statewide. In California, only four groups of professionals can legally prepare tax returns for a fee: -- CTEC Registered Tax Preparers (CRTPs) -- Enrolled Agents (EAs) -- Certified Public Accountants (CPAs) -- Attorneys
CTEC was established in 1997 by the California State Legislature to protect the public by registering tax preparers within the state. Last year CTEC registered more than 40,000 tax preparers.
For more information about CTEC, or to verify a CRTP, call 877-850-CTEC(2832) or visit us online at http://www.ctec.org.