BY TOM CAIAZZA
Staff Writer
Special Agent Alan Drucker of the Internal Revenue Service wants you to know there may be more constants in life than just death and taxes.
As the 2007 tax season shifted into high gear in recent weeks – filing day is April 17 – Drucker, a member of the Criminal Investigation division of the IRS, was participating in a national grassroots initiative to educate the public about scam artists who promise fraudulently inflated tax refunds in return for astronomical prices.
“If it sounds too good to be true, it always is,” he said.
Drucker and his partner, Special Agent Robert Glantz, were visiting area shopping malls to educate people on the dangers of tax preparation scam artists and the need for vigilance when preparing a tax return.
The IRS agents were at the Menlo Park Mall, Edison, on Feb. 8 and at the Freehold Raceway Mall, Freehold Township, on April 6, to dispense literature and tips on how to spot a scam artist and what to do if you have been duped by what Drucker called “unscrupulous tax preparers.”
Drucker said these unsavory individuals tend to prey on less sophisticated and less educated taxpayers, those who may not be able to afford the services of more reputable tax preparation companies, but who are not comfortable filing their taxes on their own.
“You’re entrusting (the preparers) not only with your taxes,” Drucker said, “but with your identification information. Some of the unscrupulous ones are taking advantage of that.”
According to the IRS, there were 197 criminal investigations into tax return preparer fraud initiated in fiscal year 2006, of which 153 of those were prosecuted. The incarceration rate for those prosecuted is nearly 90 percent with those convicted serving an average of 18 months in prison, home confinement or electronic monitoring.
Drucker said people should be on the lookout for “pie in the sky” promises of huge tax returns, especially regarding some of the less-known or less-understood aspects of the 2007 tax return paperwork.
Drucker said that with a recent court decision overturning the telephone excise tax, some tax preparers are promising inflated tax returns on that filing. This year the IRS is offering a telephone excise tax refund for those who paid their telephone bills and were charged this tax over its 41-month existence. Drucker said the average refund is between $30 and $40, but that fraudulent preparers are telling people to claim much more than they really should and are promising returns in the hundreds of dollars.
“People are lured in on false pretenses,” Drucker said. “Most of the tax preparers are credible, but the unscrupulous ones are taking advantage of them.”
Drucker and the IRS offered tips on how not to get ripped off by fraudulent tax preparers, or worse, be investigated by the IRS Criminal Division.
Some of those tips include being wary of preparers offering larger returns than others, those who do not sign or offer copies of the tax returns they prepare, and those who base their fee on a percentage of the tax return. The IRS recommends doing research into the credibility of the tax preparer. Are they affiliated with other tax companies? Do they have the proper credentials to be handling all aspects of the tax system (i.e., CPAs, lawyers)?
Drucker said that at the end of the day, the person filing is ultimately responsible for the tax return he or she provides. While simple mistakes and erroneous information may not elicit an investigation by the IRS, those with intent to defraud very well could. So Drucker urged people to report potential scam artists especially for victims of fraudulent tax returns.
For more information on fraudulent tax preparers or any other questions regarding the IRS, Drucker recommends visiting www.IRS.gov or calling 1-800-829-1040.
Overall, Drucker said the point of the personal contact with the public is to educate and show a side of the IRS not often seen.
“We do have faces on what seems to be faceless organization,” he said. “We have a human side.”