Consumers with newly acquired tax refund checks might notice numerous offers and incentives to spend cash right away; Better Business Bureau says to save funds for further review.

According to the Internal Revenue Service, the average 2012 tax refund is roughly $3,000.

BBB warns refund recipients and big spenders to be wary of:

1. Check-cashing businesses that offer special discounts for cashing refunds.
2. “Bring in your tax refund” incentives for deposits or guaranteed credit approval.
3. Conveniently-timed “buy now” advertisements on high-end merchandise, luxury items and other expensive services, such as: furniture; electronics; cars; clothing; jewelry; cosmetic services; and vacations.

“Advertised deals could be exaggerated or misleading. In worst case scenarios, buyers end up in financial hot-water with no recourse for voiding contracts or returning purchases they can’t afford,” says Kim States, BBB President. “In other cases, tax refund checks are lower than anticipated, but consumers have already committed to certain deals or savings plans before knowing exactly how much money they’ll receive.”

After taxes, BBB offers eight smart spending and savings reminders:

• Budget. Wait until returns are received to evaluate how assets will be allocated.
• Spend wisely. Compare deals, review purchase policies and thoroughly research companies before buying.
• Acknowledge asterisks in ads. Make sure to read contracts and fine print carefully. Get verbal promises in writing.
• Track accounts. Make sure deposited checks are applied to accounts. Use credit cards on more expensive merchandise; monitor account activity and contest unauthorized post-transactional charges.
• Dodge debts. Consider using refund cash to cover bills, loans or student expenses.
• Save for safety. Contemplate allocating a portion of the funds in a separate account for unexpected emergency costs.
• Protect purchases. During Financial Literacy Month and year-round, utilize free financial tips and anti-fraud resources at mymoney.gov, consumerfinance.gov,  ftc.gov/moneymatters and saveandinvest.org.
• Capitalize on good credit. Seek free guidance from BBB’s Managing Credit – Made Simpler at bbb.org/credit-management or find articles at www.tucson.bbb.org.

Consumers nationwide, including Tucson, are reporting a new round of phishing email scams using the BBB name and email address. Some of the new emails appear to be targeting accountants.

Consumers report that many of the latest scam emails use a BBB.org email address in conjunction with the American Institute of CPAs logo and name. The message informs recipients that their CPA license is being terminated due to tax fraud allegations and encourages them to click on a link and reply to the charges. The link leads to a third party website that downloads a virus on to the recipient’s computer.

Other scam emails appear to come from a fake BBB employee claiming that the recipient needs to review a complaint that has been filed against them, and advise BBB of their position. From there, the email appears to direct the recipient to the BBB website, but actually directs them to a fraudulent outside link.
This email scam primarily targets accountants, but BBB has received reports of other professionals receiving the emails.

Steps to take:

• Do not reply or click on the link in the email
• Forward fake BBB emails to phishing@council.bbb.org
• Delete the email
• I you clicked on any of the links run a virus scan on your computer

This is the latest iteration in a recent outbreak of scams using the BBB name. For more information about other versions of the scam, please see the following articles:

• Scammers Pick Up the Phone in New Twist on BBB Phishing Scam
• Watch Out for New Wave of Fake BBB.org Emails
• Malicious Complaint Email Claiming It’s From BBB

Consumers expecting a tax refund might be looking forward to filing their taxes early this year, but Better Business Bureau of Southern Arizona warns to be cautious of tax preparers who claim they can get larger refunds than their competitors.

According to IRS investigators, some preparers may use their clients’ personal information to file falsified returns, and may keep most of the fraudulent refund for themselves while leaving you on the hook.

It’s important to note that the taxpayer is ultimately responsible for the accuracy of all information on a tax return, even if someone else prepares it.  Individuals with fraudulent tax returns can face significant prison time as well as payment of back taxes with interest and penalties.

BBB recommends following these tips from the IRS:

• Avoid preparers who base their fee on a percentage of the refund.
• Use a reputable tax professional who signs the tax return and provides you a copy.
• Consider whether the individual or the tax preparation firm will be around to answer questions about the tax return months, or even years, after the return has been filed.
• Check the preparer’s credentials.  Only attorneys, certified public accountants and enrolled agents can represent taxpayers before the IRS in matters including audits, collections and appeals.
• Find out if the preparer is affiliated with a professional organization that provides its members with continuing educational resources and holds them to a code of ethics. (more…)