Monday Money Tip: Making sure tax preparers work for you, not themselves

As taxpayers, we entrust vital personal data to the person preparing our tax returns, including pay stubs, investments, and Social Security numbers.

But not all tax-preparers are ethical. To thwart identity thieves and other unscrupulous tax-preparers, the Internal Revenue Service in January plans to launch a database of those the agency deems qualified.

This new Directory of Federal Tax Return Preparers with Credentials and Select Qualifications (not a joke - that's the name) should be available next month on the IRS website to help taxpayers verify credentials and qualifications of tax professionals.

The directory will be a searchable, sortable database with name, city, state and zip code of credentialed preparers, as well as those who have completed a new IRS credential program. The proper credentials include having a valid 2015 Preparer Tax Identification Number (PTIN).

The IRS recently updated its Choose a Tax Pro web page (www.IRS.gov/chooseataxpro), and partnered with industry groups, such as the American Institute of Certified Public Accountants and the American Association of Attorney-Certified Public Accountants.

To avoid identity theft, never sign a blank tax return.

This is a serious red flag: The tax preparer can insert anything on a blank return, even his or her own bank account number, and then steal your tax refund.

Also, the IRS does not contact taxpayers by telephone, e-mail, or text demanding money. If someone does contact you in any of those ways, it's a scam.

Here are the tell-tale signs:

Phone calls demanding immediate payment; the IRS will not call you regarding taxes owed without first having mailed you a bill.

Demands that you pay taxes without giving you the opportunity to question or appeal the amount.

Demands that you use a specific payment method for your taxes, such as a prepaid debit card.

Requests for credit or debit card numbers over the phone.

Threats to bring in local police or other law-enforcement groups to have you arrested for not paying.

Don't pay. Instead, telephone the IRS directly (1-800-829-1040) and report the incident to the Treasury Inspector General for Tax Administration (1-800-366-4484) or at the IG's website (www.tigta.gov).

215-854-2808

@erinarvedlund