DENVER — A family is out of thousands of dollars after their tax return was botched.
Andrea Dean had big plans for the nearly $6,000 tax refund she expected last year, including finishing her home renovation.
But that money is sitting in a bank account that isn’t hers — and no one has come forward to report the unexpected deposit.
“I work all year for this, I expect to have the money back,” she said.
Dean said a friend who said she is an attorney prepared her taxes for a fee, then put the wrong bank account number on the tax refund portion of the electronic filing form.
She said the woman asked her to email pictures of her W-2 form and other documents, then submitted the return approving an electronic signature.
The IRS said once a taxpayer signs a return, it is final.
If there are errors caused by a tax preparer, taxpayers must initiate a civil case against that person or business to settle the loss.
However, if an error points to possible fraudulent activity, the IRS will investigate.
Tax consultant Chadwick Elliott of the Denver Tax Group said it is always important to keep all tax documents — even when filing electronically — in the event of an investigation.
Elliott adds that looking into suspected fraud can take time.
“They can take up to three to five years to resolve some of those issues so it’s very important to pick someone reputable,” he said.
The Denver Better Business Bureau has advice for anyone looking to choose a tax preparer.
- Get Referrals. To find a tax preparer, start by asking friends and family for recommendations, then check BBB Business Reviews at bbb.org. Look beyond the letter grade; complaint details and Customer Reviews will tell you about others’ experiences.
- Make sure they are properly registered. A tax preparer must obtain a PTIN from the IRS. Never let someone work on your taxes unless they have this number. Don’t be afraid to ask about this or other qualifications; a capable professional does not mind questions.
- Look for credentials. Anyone with a PTIN can prepare your tax forms for you, but some tax preparers have more training and qualifications than others. Enrolled agents, certified public accountants (CPAs) and attorneys have unlimited rights to represent their clients to the IRS on all matters. Other preparers can help you with forms and simple IRS matters, but are limited otherwise, and they can’t help you if they didn’t prepare your form. Learn more about tax preparer credentials on the IRS website.
- Keep a watchful eye for promises. Be wary of any tax preparation service that promises larger refunds than the competition, and avoid tax preparers who base their fee on a percentage of the refund. Also be wary of “refund anticipation loans,” which can take a hefty chunk of your refund in commission. Refunds are processed quickly these days, so it’s a better bet to just wait for the real thing rather than pay a premium to get it now.
- Search for free tax programs. There are several free government programs that prepare taxes free of charge if you meet an income requirement; go to the IRS’s Free File page for more information. Check with your state government to find out about their program (search “file tax free” and your state’s name in a search engine, and look for .gov websites).
- Tax Software and Apps. If you plan to file yourself, use tax software or an app that provides both excellent data security and good customer service. Some of the top names in tax prep software are BBB Accredited Businesses, so check with bbb.org first.