Schneiderman: New Yorkers should remain vigilant during tax season, follow tips to stay safe, and report suspected scams
With this year's tax deadline looming and April marking National Financial Literacy Month, Attorney General Eric T. Schneiderman offered New Yorkers tips to avoid falling victim to reported tax season scams. The attorney general also asked taxpayers to notify his office of any suspected fraudulent schemes designed to steal personal and financial information from consumers.
"Some of the most common scams reported to my office involve fraudsters targeting consumers during tax season, and I hope New Yorkers remain vigilant leading up to Tax Day," Schneiderman said. "By keeping in mind a few basic tips and reporting suspected fraud, consumers can stay safe and ensure that they get to keep the full tax refund to which they're entitled."
Each year, the office of the attorney general receives complaints from consumers about various tax preparation schemes. This year, the attorney general's office has received numerous complaints about scammers who are impersonating IRS officials and attempting to collect bogus tax debts. The scammers often threaten lawsuits or arrest if consumers fail to turn over money or provide sensitive personal information. Often, the scammers claim consumers owe past tax debts and insist consumers pay using a pre-paid credit card. Pre-paid credit cards are generally difficult to trace and that is why many scammers insist that would-be scam victims pay using these products. A sample IRS scam call can be found HERE.
In an effort to help New Yorkers avoid tax-themed scams, the attorney general's office offers the following tips:
The following suggestions will help consumers file their tax returns safely and keep more of their return:
Consumers should also beware of refund anticipation loans (RALs) and refund anticipation checks (RACs). RALs are often marketed as "instant" or "24-hour" refunds, but are actually high-cost loans that come with fees and interest that reduce the amount of any refund. New York State's General Business Law section 372 (known as the Consumer Bill of Rights regarding Tax Preparers), requires RALs to be marketed as loans - not refunds. RACs are temporary bank accounts established on behalf of a taxpayer into which a direct-deposit refund can be received - but these also come with fees that will reduce the consumer's refund. The tax preparer must give the consumer a written disclosure that explains:
Consumers can avoid the costs of refund anticipation loans and checks by filing their return electronically and having refunds mailed or directly deposited into their own bank accounts.
Consumers may report suspected instances of consumer fraud by calling Schneiderman's office at 1-800-771-7755 or by visiting www.ag.ny.gov.
The attorney general also reminds New Yorkers there are volunteer income tax assistance (VITA) sites where consumers can get their tax returns prepared free of charge. For more information about how to qualify and identify VITA location sites, go to www.irs.gov.
Consumers whose income is $62,000 or less may qualify for FreeFile and can use free tax preparation and e-filing software. Information on free e-filing is available at: www.tax.ny.gov.
Some additional websites with helpful information include:
Schneiderman is urging New Yorkers to be vigilant consumers and to report instances of fraud to his office. Consumers who feel they've been victims of any tax preparation scams are urged to file complaints by visiting the office's website or calling 1-800-771-7755. Consumers can also file an online complaint with the U.S. Treasury inspector general at http://www.treasury.gov/tigta/contact_report_scam.shtml.