Common Tax Schemes to Avoid

Beware of scammers aiming to steal finances and identities during tax time. Better Business Bureau serving Alaska, Oregon and Western Washington highlights tax troubles to avoid:

Tax Preparation Schemes: More than 60 percent of taxpayers pay tax professionals to do their returns, according to the Internal Revenue Service. The problem? Some tax preparers aren't qualified or licensed; and fraudsters are only after financial data. Beware of tax professionals touting that they can bypass tax laws, guarantee higher refunds or accelerate the refund process. Service fees should be fixed and disclosed in writing—not based on tax return percentages.

Confirm preparers have an IRS Preparer Tax Identification Number (PTIN) and understand their responsibilities. Based on the industry, check registration with the state Board of Accountancy, the State Bar Associations, the IRS Enrolled Agent Program or other organizations. Do research with BBB and get IRS points and tips.

Risky Refund Offers: "Rapid Refunds" or "Instant Cash Refunds" offers may sound enticing. Often, these offers are Refund Anticipation Loans (RAL), which allow tax filers to borrow against their anticipated tax refund. Tax loans must be repaid—regardless of whether the refund is delayed, denied or lower than expected. This can put consumers at risk with: high interest rates; loan fees; and potential credit problems, if the loan isn't paid back on time.

RAL providers should only charge a flat fee that is not dependent on the tax return amount. Review the fine print before signing contracts. IRS.gov has more RAL tips.

IRS Frauds: Be wary of suspicious communications claiming problems with taxes or refunds. Frauds mimic the IRS or other entities to request personal data. Phishing e-mails often contain links to fraudulent websites where consumers are asked for financial or personal information. Certain sites can infect computers with viruses or malware. For tips on unsolicited messages, check with the IRS and read BBB's alert.

Get Help: Some IRS offices will be open March 26, to help taxpayers; participating offices are listed on IRS.gov. After taxes, safely shred unneeded documents at BBB's Secure Your ID Day: April 16, 2011 in Beaverton, Ore. and Kelso, Wash.