Charges: Tax Preparer Filed Early — And Often

An H&R Block tax preparer and a co-defendant have been charged with using H&R Block tax records to file at least 60 fraudulent tax refund claims for clients — without the clients’ knowledge — and pocketing almost $300,000 in bogus refunds.

Authorities allege that tax preparer Francesa Foster and co-defendant Rosetta Buchanan filed the false claims in January through March of this year, after Foster had printed out H&R Block client information, including dates of birth, wage information and Social Security numbers. Foster had worked in the H&R Block office in East Chicago, Ind.

Police and the Internal Revenue Service began investigating when former H&R Block clients tried to file taxes for 2009 and were told someone had already filed taxes under their Social Security numbers.

Foster and Buchanan were arrested March 18 after police observed a vehicle weaving in and out of its traffic lane. Buchanan was driving the car and appeared to be intoxicated, according to the arresting officer. Foster was a passenger in the car.

Police found four laptop computers, H&R Block client information sheets, blank W-2 and 1099 tax forms, and more than 100 debit cards in third-party names in the car. Buchanan also had more than $1,500 in cash in her pockets, police said. At a later detention hearing, federal prosecutors said they found a storage locker in which the pair had stored $47,000 in cash and more tax documents, according to the Post-Tribune of Merrillville, Ind.

Spokespersons for H&R Block have said the company is working with the IRS, local authorities, and clients identified as victims, and have offered victims free identity theft protection service for a year.

Although the victims in this case went to a well-known tax preparation chain, the episode illustrates that there are no hard-and-fast guarantees against having your identity stolen.

But you can and should research your preparer with the Better Business Bureau and IRS Office of Professional Responsibility to verify the status of their license. Also watch for your annual statement of earnings from the Social Security Administration. That will identify all individuals working in the United States under your Social Security Number.