Tax Fraud Red Flags: Maryland Comptroller cracking down on fraudulent tax preparation companies

Maryland Comptroller Peter Franchot is cracking down on tax preparation companies that try to fleece money from the state with bogus tax returns and is warning tax payers to be on the lookout for scammers this tax season.

Franchot says he has recently suspended processing electronic tax returns from 15 private tax preparers throughout the region due to a high volume of questionable returns received.

These 15 are in addition to others red flagged by the state, bringing the total number to 54 tax preparers in all. "We're just plagued with this. We urge everybody to be very careful," Franchot said when he visited FOX 5 Monday. "Be very careful about your Social Security number. Be careful about who prepares your taxes - and just be on alert."

Franchot said his office doesn’t go after the individuals, although sometimes it is obvious they are colluding with the preparers. "How can you not be when you're taking deductions for a business when you don't have a business?" he said.

Instead, the state targets the tax preparation companies themselves. "I'm going after the preparers because we know that they are fraudulent and we're cracking down on them."

Franchot also warned taxpayers to be extra vigilant against the possibility of identity theft. He said scammers often steal Social Security numbers and use them to unlock everything about the tax payer. "Don't give your Social Security number out unless it's absolutely necessary," he said.

TAX FRAUD RED FLAGS

- Business income reported but taxpayer doesn't own a business

- Refund requested much higher than previous years

- Inflated/undocumented business expenses

- False reporting of dependents

- Inflated wage/withholding info

TO REPORT TAX-RETURN FRAUD CALL:

1-800-MD-TAXES (1-800-638-2937)

or EMAIL:

TAXHELP@comp.state.md.us

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