Insights Into Tax Preparer Frauds

Tax season can send blood pressure soaring and often people try and find interim relief by hiring tax prepares to compute taxes and fill tax return forms for federal and state taxes. It is important to make all efforts to avoid tax preparer frauds and become victims of erroneously filed tax returns.

The IRS every year tries to raise tax payer consciousness by issuing warnings about tax preparers who file fraudulent tax returns and the tax payer becomes the victim as he or she is unaware of the mistakes deliberately made. Tax payers face criminal charges and have to pay steep penalties for crimes committed unknowingly by them.

You can avoid tax preparer frauds by opting to file your returns personally or appointing a tax preparer who is above board and is a qualified person with an established reputation.

• Avoid appointing tax prepares who make tall claims about saving you thousands in taxes. Such people falsify your records and fill fraudulent tax returns.

• Insist on getting references of clients and checking the references out. Also find out if there are any legal cases or complaints against the tax preparer.

• A reliable tax preparer will sign your tax return and send you copies of all documents filed with the IRS.

• Always make the effort of checking the return before you file it so that you know what you are filing as federal or state returns. Ask for substantiation and clarifications on any point you do not agree with or understand in your tax return. Only sign the return when you are fully satisfied that everything is accurate.

• View preparer's who suggest basing their fee as a percentage of tax refund they get you. View such people with suspicion.

• Never sign any blank forms. To avoid last minute problems begin the tax filing procedure well in time.

• Ensure that the tax preparer appointed by you does not inflate expenses, enter false information, hide income, or claim credits when not due. Learn how tax preparers manipulate records and ensure that your tax return is accurate and above board.

Protect yourself and be an honest citizen by only choosing a tax preparer who is qualifies, has the right affiliations, has not complaints against him, does not lead you up the wrong path, and gives you a clear idea on what to expect as a tax refund.

If you ever suspect a fraudulent tax preparer check with the IRS or report your suspicion. The IRS has toll free lines: 1-800-829-0433. The IRS has collated data on tax preparer frauds and presented it at http://www.irs.gov/newsroom/article/0,,id=134094,00.html . Be aware and read through the IRS guidelines. Protect yourself and your reputation as an honest law abiding US citizen.