Choose a tax preparer who is right for you
Michigan taxpayers should choose a qualified tax preparer to ensure their individual income tax returns are completed correctly and appropriately, according to the Michigan Department of Treasury (Treasury).
Under state law, taxpayers are responsible for the content within their tax returns and for any additional payments, penalty and interest that may result from a tax preparer’s error. While the state of Michigan does not require tax preparers to be licensed, many are licensed, certified and belong to professional organizations that require a minimum level of education and provide ongoing training.
“Unqualified tax preparers may overlook legitimate deductions and credits that could result in a taxpayer not getting the right amount of refund owed or pay more than they should,” Michigan Treasurer Nick Khouri said. “Qualified tax preparers will help our taxpayers ensure their refunds are properly filed so we can efficiently process them.”
Asking questions is worth the time it takes to make sure a tax preparer is hired with the skill level needed to prepare an individual’s taxes at an affordable price. Before engaging in the services of a tax preparer, ask the following:
What kind of formal tax training do you have?
Do you hold any professional licenses or designations, such as Certified Public Accountant (CPA), Enrolled Agent (EA), Registered Accounting Practitioner (RAP), Accredited Tax Advisor (ATA) or Accredited Tax Preparer (ATP)?
Do you take continuing professional education classes each year? How many hours do you take?
How long have you been preparing tax returns?
Have you ever done a tax return dealing with my situation?
How much do you charge and how do you determine your fee?
Are you open year-round to assist me with any problems I may have later?
Do you offer e-filing as a service?
Are you authorized to and will you represent me in an audit or collection matter with the IRS or the Michigan Department of Treasury should the situation come up?
How do you stand behind your work?
Can you provide me with the names of references I can contact about the quality of your work? Think about checking with the Better Business Bureau in your area for complaints about the services provided by the preparer.
If the refund is direct deposited, is it deposited into my account or into an account owned by you or your company?
Consider the following when selecting a tax preparer:
Avoid those who claim they can obtain larger refunds than other preparers or those who "guarantee" results.
Avoid those who base their fees on a percentage of the amount of your refund.
Choose someone you can reach after the return is filed and who is responsive to your needs.
Taxpayers are responsible for the accuracy of all information on the return.
Do not sign the return until it’s thoroughly reviewed by you. Make sure all personal information is correct (Social Security Number, address, number of exemptions, sources and kinds of income, etc.).
Never sign a blank form and never sign in pencil.
A tax preparer can be allowed to discuss an individual’s return with Treasury by checking the authorization box on the line just below your signature.
Tax preparers must sign the return, fill in the preparer areas of the form(s) and provide you with a copy. Do not walk out the door without a copy of the return, as filed, in hand. Keep the copy of the provided return for future reference.
E-filed returns are usually processed faster than returns that are mailed and still subject to review. Rely on Treasury for return processing timeframes, not the preparer. Individuals can check their refund status online by going to www.michigan.gov/wheresmyrefund.
To learn more about Michigan’s individual income tax and choosing a tax preparer, go to www.michigan.gov/incometax. The Internal Revenue Service also provides a list of approved federal tax return preparers.
For more information about e-filing, go to www.mifastfile.org.
The Michigan Department of Treasury, Internal Revenue Service and the tax industry recently issued an alert to all employers that an old Form W-2 email phishing scam has evolved beyond the corporate world and is spreading to school districts, restaurants, hospitals, tribal organizations, nonprofits and others.
In a related development, the W-2 scammers are coupling their efforts to steal employee W-2 information with an older scheme on wire transfers that is victimizing some organizations twice.
Here’s how the scam works: Cybercriminals use various spoofing techniques to disguise an email to make it appear as if it is from an organization executive. The email is sent to an employee in the payroll or human resources departments, requesting a list of all employees and their W-2 forms.
Unfortunately, the individual receiving the email unknowingly provides the requested information to the cybercriminal. This scam is sometimes referred to as Business Email Compromise (BEC) or Business Email Spoofing (BES).
When employers report W-2 thefts immediately to the IRS, the agency can take steps to help protect employees from tax-related identity theft. As the state Treasury Department, IRS and the tax industry enact safeguards to identify fraudulent returns filed through scams like this, cybercriminals need more data to mimic real tax returns.
The state Treasury Department urges all employers to be vigilant. This W-2 scam, which first appeared last year, is circulating earlier in the tax season and to a broader cross-section of organizations, including school districts, tribal casinos, chain restaurants, temporary staffing agencies, healthcare and shipping and freight.
Businesses that received the scam email last year also are reportedly receiving it again this year. The Internal Revenue Service and other partners warned of this scam’s reappearance last week but have seen an upswing in reports in recent days.
New Twist to W-2 Scam: Companies Also Being Asked to Wire Money
In the latest twist, the cybercriminal follows up with an “executive” email to the payroll or comptroller and asks that a wire transfer also be made to a certain account. Although not tax related, the wire transfer scam is being coupled with the W-2 scam email, and some companies have lost both employees’ W-2s and thousands of dollars due to wire transfers.
The state Treasury Department, IRS and tax industry urge all employers to share information with their payroll, finance and human resources employees about this W-2 and wire transfer scam. Employers should consider creating an internal policy, if one is lacking, on the distribution of employee W-2 information and conducting wire transfers.
Steps to Take If They See the W-2 Scam
Organizations receiving a W-2 scam email should forward it to firstname.lastname@example.org and place “W2 Scam” in the subject line. Organizations that receive the scams or fall victim to them should file a complaint with the Federal Bureau of Investigation’s Internet Crime Complaint Center (IC3).
Employees whose W-2 forms have been stolen should review the recommended actions by the Federal Trade Commission at www.identitytheft.gov or the IRS at www.irs.gov/identitytheft.
The W-2 scam is just one of several new variations that have appeared in the past year that focus on the large-scale thefts of sensitive tax information from tax preparers, businesses and payroll companies. Individual taxpayers also can be targets of phishing scams, but cybercriminals seem to have evolved their tactics to focus on mass data thefts.
Be Safe Online
In addition to avoiding email scams during the tax season, taxpayers and tax preparers should be leery of using search engines to find technical help with taxes or tax software. Selecting the wrong “tech support” link could lead to a loss of data or an infected computer.
Taxpayers searching for a paid tax professional for tax help can use the IRS Choosing a Tax Professional lookup tool or if taxpayers need free help can review the Free Tax Return Preparation Programs. Taxpayers or tax preparers looking for tech support for their software products should go directly to the provider’s web page.
Employers asked to be on alert for old w2 phishing scam