Avoid Tax Fraud

When filing your taxes with a professional preparer, you are trusting your finances to their hands. Some who claim to be tax preparers, though, are not trustworthy individuals. For any number of motives, these well-disguised scam artists manipulate numbers and add false information to claim you are getting a higher refund. This is probably not going to be with your knowledge, but when the IRS discovers the falsehoods that won’t matter- you will be responsible. It is of the utmost importance that you choose your tax preparer as carefully as if it were a life or death matter. There are a few things to look for when choosing a tax preparation specialist.

If the preparer bases their fee on a percentage of your refund, red flags should instantly fly. This would give them reason to inflate your refund so that they receive more money. A claim to obtain a larger refund than other preparers may also signal trouble; with the right information, your tax status should be the same no matter who files it.

Whether or not you see these warning signs, you should always verify the individual’s credentials. Titles to look for are Accredited Tax Preparer, Enrolled Agent, CPA (Certified Public Accountant), Licensed Public Accountant and Tax Attorney. Keep in mind that Accredited Tax Preparers (or individuals with a title not listed here) cannot represent you before the IRS in case of fraud. Asking around for references for the preparer will give you an idea of his crediblity as well. Affiliation with an organization that educates its employees and holds them accountable is another way to verify his crediblity. Even so, since the information on your tax return is your responsibility, always check all of the information before you sign it and ask any necessary questions.

If you have found a tax preparer that you suspect of fraud, don’t overlook the situation. Tax evasion is a felony and punishable by a $250,000 fine and up to 5 years imprisonment. If the indiviual is not reported, he will not suffer any consequences for placing others in that situation. You can find your local IRS information or contact them by phone at 1-800-829-0433.