WATCH OUT!
EACH YEAR SEVERAL HUNDRED TAX PREPARERS ARE ARRESTED FOR TAX FRAUD.
And nearly 80% of those are sent to prison
EACH YEAR SEVERAL HUNDRED TAX PREPARERS ARE ARRESTED FOR TAX FRAUD.
And nearly 80% of those are sent to prison
Tax preparation and filing of false income tax returns by preparers who claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients. Preparers may manipulate income figures to fraudulently obtain tax credits. Some have also engaged in Identity Theft. Every year, these types of tax preparers face everything from penalties to even jail time for defrauding their clients. Guess what? When they are caught, the taxpayer is responsible for paying the additional tax, penalties and interest which could be staggering!
Choosing Return Preparers Carefully
It is important to choose carefully when hiring someone to prepare your return. Well-intentioned taxpayers can be misled by preparers who don’t understand taxes or who mislead people into taking credits or deductions they aren’t entitled to in order to increase their fee.
It is important to choose carefully when hiring someone to prepare your return. Well-intentioned taxpayers can be misled by preparers who don’t understand taxes or who mislead people into taking credits or deductions they aren’t entitled to in order to increase their fee.
Make sure the preparer has an IRS Preparer Tax Identification Number (PTIN).
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1. Check to see if the tax preparer has a professional credential (enrolled agent, certified public accountant, or attorney).
2. Check on the service fees upfront. Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can. 3. Always make sure any refund due is sent to you or deposited into your bank account. Taxpayers should not deposit their refund into a preparer’s bank account. 4. Make sure your preparer offers IRS e-file and ask that your return be submitted to the IRS electronically. Any tax professional who gets paid to prepare and file more than 10 returns generally must file the returns electronically. Provide records and receipts. 5. Good preparers will ask to see your records and receipts. They’ll ask you questions to determine your total income, deductions, tax credits and other items. Do not rely on a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules. 6. Never sign a blank return. Don’t use a tax preparer that asks you to sign an incomplete or blank tax form. Review your return before signing. 7. Make sure you’re comfortable with the accuracy of the return before you sign. Ensure the preparer signs and includes their PTIN. 8. Report abusive tax preparers to the IRS. You can report abusive tax return preparers and suspected tax fraud to the IRS. |
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