ID Authentication Must Precede Background Checks

A recent incident at a North Carolina Liberty Tax franchise indicates that consumers should use discretion when hiring a paid professional to prepare their tax return.

A tax preparer temporarily hired during the busy tax season was arrested after she forged the bank account routing information on a clients' income tax return and stole their refund. In fact, during the time she was employed at Liberty - from January 14 to March 13, 2009 - she got away with robbing seven clients before her machinations were revealed. By the time she was arrested, the 23-year-old managed to spend over $7,500. The branch owner personally reimbursed each victim for the losses.

The victims will now think twice before they entrust another service provider with personal information; yet, they shouldn't have to. They have the right to reasonably expect the tax preparer to deliver its end of the contract and safeguard its clients' information. Because of the sensitive nature of its services, the firm must ascertain that its tax preparers possess a strong moral fiber and a sound background. Consequently, the first question authorities had for Liberty Tax is whether they conducted a proper background check.

Turns out, when Angela White applied for the job she used the alias Angela Chigo-Chiguila, which explains her clean background check. This indicates that additional steps must be taken prior to the background check, to ascertain the authenticity of candidates' ID. Of course, consumers are still expected to take reasonable precautions:

• Before selecting one, always screen potential tax preparer firms with the Better Business Bureau and ask for references from long-term clients.

• Don't be intimidated to interview tax preparers and find out if they have an established, effective process for background checks.

• Keep a paper trail; make sure you get and keep a copy of your tax return signed by you and your preparer, and never sign blank forms.

The management of Liberty Tax announced that they are taking appropriate precautions to protect their clients and ensure this kind of problem does not occur in the future. Let's hope the first thing they do is implement revisions to improve the effectiveness of background checks.