Some accountants file false tax returns with bogus tax deduction claims to help taxpayers reduce or eliminate their tax liability. They do it to make quick money, and it is not always the tax preparer that initiates the fraud. Many times, scammers approach tax preparers and convince them to participate, to get a share of the money received through a refund.
The ease with which this tax fraud can be done, the temptation of easy money, and the absence of violence is what makes this crime so tempting. The thought of punishment, which includes heavy fines and possible imprisonment, seems distant and unrealistic.
Filing false tax returns can be achieved by scammers through stealing taxpayers’ identities, by tax preparers without the taxpayer’s knowledge, or by the taxpayers themselves.
Many times, taxpayers are oblivious to the wrongdoings of their tax preparers. Fraudulent tax preparers bloat expenditures, claim false deductions, and alter income figures to claim large refunds without the consent of taxpayers. It is only after the IRS discovers the fraud that taxpayers are contacted.
Whether tax preparers are tempted by scammers to indulge in tax fraud or they initiate the scheme, in the end it is the taxpayers who pay the price for the fraud. Falling victim to tax fraud costs a taxpayer both time and money. The IRS can take a long time to investigate the crime, review the tax forms filed, and find a resolution. The cases of tax fraud are taken to court after investigation. Therefore, it is important for taxpayers to avoid falling victim to temptations, scammers and fraudulent tax preparers.
Taxpayers must keep their tax identity safe and check the credentials and Preparer Tax Identification Number (PTIN) of the tax preparer they choose. They should also review the information on their tax forms before signing. It is better to take the extra time to ensure you do not fall victim to unscrupulous tax preparers and scammers.