Tax Fraud and Other Red Flags You Can Discover with Background Checks in 2021

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If you have ever hired anyone, you probably already know there is no such thing as a perfect hire. That is mostly because there is no such thing as the perfect human. There is no perfect height or weight or size or IQ… You get the idea. As long as you are hiring humans, you will be stuck with a mixed bag ranging from insanely great to shockingly horrible. Even with the most lax hiring practices, you are unlikely to hit either of the extremes. But you always want to come as close to one end while pushing as far away from the other as possible. This is where employee background checks come into play.

So far, the best tool for the job of sorting which type of employee you will get is the background check. As with humans, there is no such thing as the perfect background check. But there are definitely some that are more suited to the task than others. The key is to find the best employment background check for your particular needs. A good background check will give you a lot of information about your potential hire. Some of that information will not be relevant to the job. It is hard to know which bit of information you need to focus on. Here are 5 of the most important things to check when evaluating the background information of a potential employee:

Background Checks Uncover Tax Fraud

It is obvious that if you are hiring someone to manage your accounting, you need someone who has an exemplary record when it comes to filing their own taxes. If they are willing to commit fraud in their personal life, they might be willing to do the same in their professional life, especially if they have bonuses tied to the amount of money they save the company in taxes.

It is not just a matter of taxes. Many powerful companies have been charged with all manner of accounting fraud. Sometimes, the CEO is unaware of the fraudulent activity. Sometimes, they are at the center of it. The last thing you want is to be caught conducting any type of accounting fraud. It can quite literally ruin your business. The person you hire for your accounting needs has to be completely above reproach with regard to the handling of their finances. There is little chance you will encounter someone who is unscrupulous in their personal life but completely scrupulous in their business affairs. Make this a high-priority item on your background checklist.

Criminal History Shows Up on Background Checks

Don’t let criminal history be the sole determiner of whether or not you hire a person. Everyone has a past that is not completely flattering. A person who has paid their debt to society after committing a one-time crime has a right to employment just like anyone else. Don’t be the kind of employer that punishes a person twice. 

That said, some crimes are red flags that cannot be ignored. If you run a daycare, a person who has committed crimes against children cannot be considered for the positions. And they should probably be reported for even applying for the job. Some mistakes can put your business at risk. If a person has drunk driving in their record, you probably don’t want to hire them, especially if the job requires operating a motor vehicle or dangerous equipment. That is a person who has shown poor judgement on matters of life and death. If they still have the kind of addiction that leads them to drinking and driving, they are not the person who should be trusted with regard to the safety of others. Intoxicated driving means you should probably steer clear.

Multiple Addresses in a Short Period of Time

When a person has too many addresses in a compressed period of time, it should serve as a red flag. The reason is that it suggests a lack of commitment to any one place. And unless that person has had the kind of work that can be done anywhere, they are not holding down jobs for various reasons. Some of those reasons are undoubtedly good reasons. People get fired and people quit. It happens. But when a person bounces from job to job with a high level of frequency, that is very likely not someone with whom you want to trust a lot of responsibility.

Domestic Violence

It is pretty obvious that you don’t want to associate your company with a violent abuser. This is a bad person you don’t want anything to do with. Your company should have a zero-tolerance policy with regard to violence. So should every home. Anyone who would violate that policy at home will violate it at work. You don’t keep a ticking time bomb in the office because you know it is going to go off at some point. For the same reason, you don’t keep a violent abuser in your office. 

This is not to say that one cannot have a more evolved view of people that are troubled. But that is irrelevant for your company. Some people cannot cope with the stresses of domestic life. As a result, they cope by physically lashing out. Such a person is to be pitied and medically treated. That said, the stresses of work life can also be difficult to bear. Setting a violent person up in a stressful job is setting them, and your company up for failure.

Employee Background Checks and Credit Reports

Not every job is as sensitive to theft risk as others. Cashiers and managers who handle thousands of dollars in cash every day are in a unique position to pocket some of it for themselves. The cameras at cash registers are usually not focused on the customer, but on the cashier. That is because the bigger risk to the company is the dishonest cashier and not the dishonest customer. Bad credit is a sign that a person is not only irresponsible with money, it signifies a person has a great, if not a desperate need for more of it than they get paid. Where money handling is involved, pay closer attention to credit. This type of red flag can also be uncovered through employee background checks. 

There is no full-proof method of selecting the perfect person for the job. But you can eliminate the least perfect candidates by noting the ones with a negative tax status, criminal history, multiple recent addresses, domestic violence, and extremely low credit scores.

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