Avoiding Tax Traps

Tax time is just around the corner and if you're like most people, you're trying to pretend it's not, but as you get ready to file your taxes, there are some important things you need to keep in mind, so a third party doesn't end up with some of your hard earned money.

This time of year, commercials and telemarketers are out in full force, hoping to convince you they can help you get thousands of dollars back on your tax return, but keep a close eye on your money, because not all of those businesses have your best interests at heart.

Not long ago, one area woman picked up on several classic "red flag" indicators, when a telemarketer from the National Audit Defense Network called her house. The first problem, she said, was the caller wouldn't identify himself. According to Margaret Lockhart, when she asked the representative to tell her his name, he told her it wasn't important. What was important was for her to start a portfolio and let one of his top lawyers get on the case to help her get the thousands of dollars she deserved.

Lockhart also sensed something wasn't right when they requested a lot of personal information, so she called the Better Business Bureau, and found out the NADN has been in trouble before.

We tried to contact National Audit Defense Network, we asked for supervisors twice, and twice, we were put on hold and sent to voicemail.

We want to emphasize that while there have been other complaints to the Better Business Bureau about National Audit Defense Network, that doesn't mean they are currently doing anything illegal. Last year, a federal judge temporarily halted operations of the company because it allegedly failed to live up to its refund guarantees.

If you're dealing with any company you're not familiar with, you should check with the BBB to see about the company's past. Check out www.bbb.org or www.bbbkyin.org for more information, or call 781-8445. If you suspect tax fraud, you should call the IRS. That number is 1-800-829-0433.

If you're looking for help filing your taxes this year, here are some tips to help you along, courtesy of the BBB:

  • Avoid tax preparers who say they can get larger refunds than others, especially if they base their fee on a percentage of that refund. That could lead to some serious tax problems in the future.

  • Think about whether the person or firm helping you will be around in a few months or years to answer your questions.

  • Don't be afraid to ask questions. Ask for references, ask friends and co-workers about their experiences, ask how much the preparer will charge before agreeing to the service.

  • Expect a reputable tax professional to sign the tax return and give you a copy.

  • Never sign a blank tax form.

  • Never sign a return without looking it over first. Ultimately, the taxpayer is responsible for all the information on their tax return.

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