The 2018 IRS Dirty Dozen,
Part IV: Tax Return Preparer Fraud

Tax return preparer fraud gets its own place on the IRS Dirty Dozen nearly every year, but as noted in our previous blogs in this series, it is a key component of many of the tax scams on each year’s list.

Always keep in mind that YOU are legally responsible for the contents of your tax return, even if you have someone else prepare it. Even if you hire someone to do it for you, filing a false return will get you in trouble with the IRS, and puts you at risk for civil or criminal tax penalties.

How to Choose a Reputable Tax Preparer

Although most tax professionals are honest, there are those who are incompetent and/or corrupt (or are not tax preparers at all). The IRS advises taxpayers to be cautious when choosing a credible professional to prepare your taxes. Here are some of its guidelines:

  • Check the preparer’s background, qualifications, and credentials through the Better Business Bureau, professional licensing organizations, and the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications
  • Ask for their IRS Preparer Tax Identification Number (PTIN)
  • Don’t use a tax preparer who is willing to prepare your return without proper documentation (e.g., W-2, 1099s, receipts, etc.)
  • Don’t use a tax preparer who will not be around for questions, either before or after your return is filed
  • Don’t use a tax preparer who bases their fees on a percentage of your tax refund. A good rule to follow is to never give your private information to someone who embraces this practice
  • Make sure that your return is e-filed (if a tax professional prepares returns for more than 10 clients, this is usually required)
  • Never sign a blank or incomplete return
  • Carefully review your tax return before you sign it, and make sure that your refund (if any) is paid directly to you – keep in mind that legitimate tax professionals are paid for preparing your return, they do not take a portion of your refund as payment
  • Report abusive preparers on Form 14157, Complaint: Tax Return Preparer and/or Form 14157-A, Return Preparer Fraud or Misconduct Affidavit

Tax preparers who commit identity theft, tax refund fraud and other scams are subject to hefty penalties and criminal charges. And remember, you are legally responsible too.

Full service tax firm in San Francisco

Moskowitz, LLP is a tax firm dedicated to supporting the firm’s clients with the full range of tax matters, from audits to criminal tax defense to tax planning and preparation. Call our California offices for a consultation.