Identity Theft: How To Protect Your Tax Information

Income Tax and Identity Theft

What does your tax preparer need to know about Identity Theft?

With identity theft cases on the rise, the California Tax Education Council (CTEC) is warning you to take extra precaution this tax season.

The Privacy Act requires tax preparers to provide you with a copy of their privacy policy and prohibits preparers from sharing your private information unless given permission beforehand. Consumers should always review the preparer's privacy policy before making a commitment.

"Taxing agencies are only interested in taxpayers' income and allowable expenses, so tax preparers should only ask questions specific to those items," says CTEC Board Member Jacqueline Marazzi. "If a tax preparer asks questions that do not relate to income or allowable expenses, consumers should beware."

Top five questions to ask about Identity Theft and Taxes:

• How will you ensure my private information is protected?

• How will you save my private information?

• Will you only have access to my private information?

• Will you share my private information with telemarketers?

• Do you outsource your work?

An estimated 10,000 people are illegally preparing tax returns in California. State law defines only four groups of professionals that can legally prepare tax returns for a fee:

• CTEC Registered Tax Preparer (CRTPs)
• Certified Public Accountants (CPAs)
• Enrolled Agents (EAs)
• Attorneys

CTEC was established in 1997 by the California State Legislature to protect the public by registering tax preparers within the state. Each CTEC Registered Tax Preparer is required to purchase a bond and complete annual tax education courses. Last year CTEC registered more than 40,000 tax preparers.