New Yorkers are asked to choose tax specialists very carefully: scammers have stepped up ahead of the season
'16.12.2022'
Nadezhda Verbitskaya
Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga reminded New Yorkers to protect themselves from tax preparation fraud. In particular, from “express refund advances” or “refund transfers”.
Some tax preparers do not list their expenses upfront, forcing hard-working individuals and families to pay hidden or extra taxes. DCWP encourages New Yorkers who earn $80 or less to take advantage of NYC Free Tax Prep and save on the average $000 tax professional fee.
“This tax season, we want all New Yorkers to be on the lookout. Especially in relation to predatory tax preparers. The best way to protect yourself and your family is to know consumer rights,” said the DCWP commissioner. The IRS has not yet announced when it will start accepting returns. And the preparer can't get your refund earlier. Any promise of an advance for a refund is either a loan or a sales tactic that you may end up paying for later. We encourage all eligible New Yorkers to take advantage of the NYC Free Tax Prep starting in January. This way you save every penny of your return without having to pay tax preparation fees.”
Predatory tax preparation tactics include offering money-back advances in the form of a waiting check or gift card. Loans in anticipation of repayment (RAL), or "express advances to repay", are sometimes advertised as "interest free". They usually offer a portion of the expected return. Even if RALs do not include fees or interest, some preparers may charge higher fees to borrowers.
Refund pending checks (RACs), or “refund transfers,” require consumers to agree that tax preparation fees be deducted directly from their refund for the extra money. Paid professionals can open a temporary bank account for the payer with transfer fees and other expenses.
Consumers should wait until their employer receives final tax returns, such as a W-2 or 1099, in January to file a return.
And don't use payroll or last year's information. They file a return using the data that the IRS and the State Department of Revenue have.
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By law, tax preparers must provide the filer with a copy of Consumer Bill of Rights Regarding Tax Preparers before discussing services. New Yorkers should be on the lookout if document preparers inflate prices, charge hidden fees, or file returns without permission. They can file a complaint against DCWP tax preparers by calling 311 or online. nyc.gov/dcwp.
In the upcoming tax season, the IRS will start accepting returns in January
New Yorkers who earned $2022 or less in 80 will be able to file for free with an IRS-certified volunteer through the program NYC Free Tax Prep. NYC Free Tax Prep offers a variety of free tax preparation options, including face-to-face, virtual, and home delivery. For more information, contact 311 or visit nyc.gov/TaxPrep.
DCWP licenses over 51 businesses in over 000 industries. And enforces key consumer protection, licensing, and workplace laws. The DCWP protects the market from predatory practices and strives to create a culture of compliance. Through its outreach, DCWP empowers consumers and working families, provides them with the tools and resources they need to be educated consumers and achieve financial health and work-life balance.
