Experts offer tips to prevent identity theft

Reports of identity theft come in at a rate of about one a day to the office of Indiana Attorney General Greg Zoeller, spokeswoman Molly Butters said.

"It's the No. 1 growing crime in Indiana," Butters said.

Relatively few complaints of identity theft have involved tax preparers, she said.

"There are some scams out there that we're aware of," mostly involving firms promising quick tax refunds, Butters said. "I don't know that any deal specifically with identity theft."

The Internal Revenue Service investigates complaints involving tax preparation violations, but people who believe they've been victims also can notify the attorney general's office, Butters said.

"It doesn't hurt to file a complaint with us," she said. "We could investigate, and the IRS could investigate.

Indiana residents can help fight identity theft by using a portal available on the Indiana attorney general's Web site, http://www.in.gov/attorneygeneral/2411.htm, Butters said.

The site permits Hoosiers to request a credit freeze for free.

The freeze blocks an identity thief from opening a new account or obtaining credit in the consumer's name, even if the thief had the consumer's Social Security number or other personal information.

"It gives you peace of mind because you are in complete control," Butters said.

The Central Indiana Better Business Bureau, on its Web site http://indy.bbb.org/Consumer-Tips/, offers tips for finding a trustworthy tax preparer.

About 80 percent of Americans enlist the help of a tax preparer or tax software when filing their taxes, the IRS reports.

The BBB receives thousands of complaints from consumers against tax preparers, many of them reporting errors that resulted in fines and fees.

The BBB also has warned consumers to be aware of tax-related scams that can lead to identity theft.

The most common involve e-mails or phone calls from frauds claiming to be IRS agents or representatives who ask for Social Security numbers, driver's license numbers and other personal identification information.

In reality, the BBB said, the IRS does not initiate taxpayer communications through e-mail. Legitimate tax preparers and IRS representatives will never contact a taxpayer to request a password, Social Security number or similar information, which they should already have on file.

Tax preparer tips from the Internal Revenue Service:

1. Check the person's qualifications. Ask whether the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.

2. Check on the preparer's history. Check to see whether the preparer has any questionable history with the Better Business Bureau, the state's board of accountancy for CPAs, the National Association of Enrolled Agents or the state's bar association for attorneys.

3. Find about their service fees. Avoid preparers that base their fee on a percentage of the amount of your refund or those who claim they can obtain larger refunds than other preparers.

4. Make sure the tax preparer is accessible. Make sure you will be able to contact the tax preparer after the return has been filed, even after April 15, in case questions arise.

5. Provide all records and receipts needed to prepare your return. Most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.

6. Never sign a blank return. Avoid tax preparers who ask you to sign a blank tax form.

7. Review the entire form before signing it. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.

8. Make sure the preparer signs the form. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. The preparer also must give you a copy of the return.

You can report abusive tax preparers and suspected tax fraud to the IRS on Form 3949-A, Information Referral, or by sending a letter to Internal Revenue Service, Fresno, CA 93888. Download Form 3949-A from IRS.gov or order by mail at (800) 829-3676.