- What is Tax Preparer Fraud?
- Find a Tax Preparer You Can Trust
- Did a Tax Preparer Steal Your Money?
- Tax Preparer Fraud Victim Resolution
What is Tax Preparer Fraud?
Tax preparer fraud typically occurs when a person posing as a qualified tax preparer excessively and illegally claims deductions and credits on your behalf to inflate your tax return. In return, they charge you a percentage of your total return as a fee for their services. Thesee tax preparers take their fee and run—leaving you to deal with the consequences.How does Tax Preparer Fraud Work?
Fraudulent tax preparers operate under the guise of qualified and trustworthy tax professionals. They front as a legitimate business and advertise in public spaces, such as community centers, churches, and more. They promise big returns—legally, of course. While they appear to be legit, they’re much less. Once you’ve handed over all of your tax information and agreed to pay their fee, which is always based on a percentage of your return, they’ll begin their illegal behavior. Unbeknownst to you, these fraudsters excessively claim credits, deductions, exemptions, and more on your behalf. For example, your taxes could claim deductions and tax credits for charitable donations, children, or student loan payments without your knowledge. When it comes time to submit, these tax preparers will file on your behalf, without giving you the chance to look over your return. They don’t sign as the tax preparer on your tax return or include their Preparer Taxpayer Identification Number (PTIN), leaving you looking like the fraudulent filer. By the time you realize your return contains false information, these tax preparers are long gone, and never to be seen again. Fraudulent tax preparers operate on two basic facts. First, taxpayers most often hire tax professionals because they trust that the tax professional is reputable and responsible. Second, the IRS will always hold the taxpayer responsible for their tax return, whether it was completed by a professional or not.Find a Tax Preparer You Can Trust
If you’re seeking assistance with the completion and filing of your taxes, it is imperative that you are both careful and discerning when it comes to choosing your tax preparer.How to Choose a Tax Preparer
When it comes to choosing a tax preparer, there are a few red flags that indicate your prospective preparer may be a fraud. Those include:- The promise of a larger refund than other tax preparers can get you: Reputable tax preparers will never try to lure you in with a deal that sounds too good to be true.
- A fee that’s based on a percentage of your tax return: This suggests a tax preparer may be willing to commit fraud to inflate their own paycheck.
- Cash payment: A reputable tax preparer will never require you to pay in cash.
- Solicitation: Fraudulent taxpayers often set up shop in busy areas to solicit customers. They also may knock door-to-door or contact you by phone to solicit your business.
- Tax Preparer Identification Number (PTIN): Every qualified tax preparer will have a registered identification number with the IRS. You can check and cross-reference reference this number on the IRS Tax Return Preparer Directory. If they have a number and file a fraudulent tax return on your behalf, you will be able to provide their number during the criminal investigation.
- Review Your Return: Before you allow someone who might be questionable to file your return, take a look at their work. Make sure there aren’t any false tax credits claimed on your return. Never sign a blank tax form under any circumstance.
- Verify the Direct Deposit Information: If you opt to receive your refund by Direct Deposit, ensure that it’s your bank account and routing number—not theirs.