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IRS’ “Dirty Dozen” Tax Scams: Return Preparer Fraud

February 5, 2015

The IRS releases the “Dirty Dozen” tax scams list during tax season to raise awareness among taxpayers about the top scams. Like the previous year, return preparer fraud is a part of the “Dirty Dozen” in 2015. In this scam, fraudulent return preparers either convince their clients to file inaccurate tax returns, or include false information on the returns without their knowledge to pocket refund money.

Ultimately, the taxpayer signing the return is responsible for its accuracy. A little caution in choosing a return preparer and ensuring an accurate return can save you from falling victim to unscrupulous tax preparers.

When choosing a return preparer

Legitimate return preparers are required to have a Personal Tax Identification Number (PTIN). Only return preparers that are authorized by the IRS to prepare tax returns have a PTIN. The IRS requires every return preparer to include their PTIN on every return they complete, so that the IRS can track them in case of fraud. Before hiring a return preparer, confirm that he or she has a PTIN.

Tax return preparers are not required to have professional credentials, but many enrolled agents, Certified Public Accountants (CPAs) and attorneys are qualified to prepare tax returns. Some return preparers are employed by a professional organization and attend continuing education classes, as required by the IRS. That makes them eligible to prepare tax returns.

Before filing your return

Fraudulent return preparers are after your refund money. To protect yourself, always get the refund deposited directly into your bank account. Never agree on a fee based on the percentage of the refund. That can lead fraudulent return preparers to include false information on your return to get a bigger refund.

After your return preparer has filled out the return, check it for accuracy. Make sure the PTIN is included in the return. Sign your return only after all the necessary information has been included.

 

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