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BusinessFebruary 16, 2015

In an era with an ever-increasing risk for identity theft and financial exploitation, it's no wonder people are paying closer attention to who handles their personal information and how they do it. And tax time is prime time to pay attention, according to the Internal Revenue Service...

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In an era with an ever-increasing risk for identity theft and financial exploitation, it's no wonder people are paying closer attention to who handles their personal information and how they do it. And tax time is prime time to pay attention, according to the Internal Revenue Service.

The Better Business Bureau points out that "not all tax preparers are created equal, so it's important to check a preparer's qualifications."

There are several easy, online ways to do just that.

The Better Business Bureau offers reviews of accountants and tax professionals on its website, www.BBB.org.

The IRS also launched a new tool in February that holds a federal directory of tax preparers, searchable by qualifications. The IRS warned in a separate news release that taxpayers should be aware of the most common scams during tax season and should "be on the lookout for unscrupulous return preparers."

male real estate agent shaking hands with a mid adult man
male real estate agent shaking hands with a mid adult man

Both agencies advise that a personal referral to a reliable tax professional and knowing the rules tax return preparers must follow may be the best ways to find one who takes care of personal information and ensures a safe and timely return.

"When expecting a refund, consumers are anxious to get their tax refunds as soon as they get their W-2 from their employer," says Joey Keys, regional director of the Better Business Bureau. "Consumers need to do their research before rushing to the first tax preparer they find."

The IRS issues a number, known as a Preparer Tax Identification Number, or PTIN, to people authorized to prepare tax returns, and reliable tax preparers often belong to professional organizations and have verifiable credentials. Understanding qualifications is important, according to the IRS. The agency also advises that taxpayers check on service fees up front, that they should be suspicious of preparers who promise a larger refund than others and that the preparer will have a refund set up to go into the taxpayer's bank account only. Preparers also must sign and include their PTIN on a return, and provide a copy to the client.

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The IRS directory tool, and other safety information for taxpayers, is available at www.IRS.gov.

Local tax preparers also advise that taxpayers check on how firms handle clients' information internally.

Businesswoman shredding documents on desk looking to one side
Businesswoman shredding documents on desk looking to one side

Federal law prevents tax preparers from sharing clients' information with anyone except the Internal Revenue Service, and most accounting firms won't even send emails to someone else in the company when the email contains information such as Social Security numbers, because they don't consider email secure.

Many firms upload tax returns to a portal where only the IRS has access, keeping the information off the web. Firms receive approval from the IRS to upload to the system, and clients can check for that approval.

Local accountants say tax preparers and clients must be just as careful with paper documents -- and say they educate clients as much as possible about safely storing, shredding or otherwise destroying items that list Social Security numbers, and about how to transfer information safely between, for example, a bank and accounting firm, or real estate company and bank.

Protecting oneself when filing taxes oneself has also become a focus of the popular online sites like TurboTax.

TurboTax this year posted on its website that the company is employing "the same encryption and security measures as major banking institutions," and adhering "to rigorous industry standards for protecting your sensitive financial data."

The company additionally offers "Tax Tips If You Have Had Your Identity Stolen," on its website.

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