What is Tax Preparer Fraud?

Wooden blocks spelling CPA with a stamp labeled "Fraud Alert" overlaidTax preparer fraud involves illegal conduct by a tax preparer and can take many different forms:

  • The tax preparer may direct your refund to their bank account instead of yours.
  • The tax preparer may not be qualified to prepare your return.
  • Your refund may be fraudulently inflated to get your business or earn commissions for the tax preparer.
  • Ghost tax preparers may prepare your return without signing it.

Taxpayers may be left to deal with the fallout from these issues. Your refund may be stolen or the IRS may come after you for back taxes due to the fraudulent return.

Tax Preparer Qualifications

A tax preparer needs to have a Preparer Tax Identification Number (PTIN). Anyone who is paid to prepare your return must include this number and their signature on your return. Don’t use a tax preparer without a PTIN or one who refuses to sign your return.

You should also search the internet for information about a tax preparer’s reputation. Don’t give the tax preparer your personal documents until you’ve thoroughly vetted them.

Unethical Practices

Some tax preparers promise “big refunds” to attract clients. Others may base their fees on a percentage of your refund, giving the preparer an incentive to increase your refund by fraudulent means.

Beware of any tax preparer who advertises their services this way. If they add improper deductions or credits to illegally exclude income from your return, you may be the one who suffers the consequences. The IRS could come after you for back taxes, penalties, and even tax fraud charges.

Stolen Refunds

A common tactic of fraudulent tax preparers is to divert your refund into their bank accounts. They swap out your routing and account numbers for theirs, and your tax refund is deposited directly into their accounts.

By the time you figure out what’s happened, the tax preparer may be long gone, and the IRS will believe that your refund has already been released to you.

Get Professional Help

You can make a complaint with the IRS if you have been financially harmed by tax preparer fraud. You may also need to work with a tax attorney to deal with any back taxes or penalties you owe to the IRS.

Get help handling issues caused by tax preparer fraud by contacting Ayar Law at 248-262-3400 to request your consultation with a tax attorney.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.