Take it from a licensed CPA, there are plenty of honest tax preparers out there. However, many are not.
Below are just a few of the fraud-related news stories from recent years about unlicensed tax preparers committing fraud. From all over the country and all walks of life, these “tax preparers” knew what they were doing. Unfortunately, their clients did not.
If you need any more reason to hire a licensed CPA, consider this: when unlicensed preparers make mistakes, you are the one who will pay for it—in fines, back taxes, and possibly an audit. In most cases, they do not sign your tax return; you do. So, unfortunately, there is no recourse for you.
Avoid unscrupulous tax preparers who include errors or false information on a tax return that could leave you open to liability for unpaid taxes, penalties, and interest.
❗Tax Preparers Committed Fraud
- Women Sentenced to Prison for Preparing False Tax Returns for Clients
- Prince George’s County Unlicensed Tax Preparer Pleads Guilty to Filing Fraudulent Tax Returns
- “Ghost” Tax Preparer Gets 5-Year Sentence After Filing False Returns
- “Don’t Pay – Walk Away.” Secretary of State Cisco Aguilar warns against fake tax preparers as the deadline for tax season gets closer
- IRS Form 14157: What It Is and Why You May Need It
- Beaumont tax return preparer could lose business, accused of fabricating claims, charging unauthorized fees
- Former Financial Advisor and Tax Preparer Admits Multiple Counts of Preparing False Tax Return
- Atlantic County Tax Preparer Admits Tax Fraud
- Wildwood Mayor Admits To Tax Fraud: Federal Officials
- Galloway tax preparer gets one year and a day in fraud case
- Tax preparer from Placentia pleads guilty to tax fraud
- Jason Williams’ tax preparer admits illegally manipulating returns for clients
- Jacksonville tax preparer pleads to fraud, faces 3 years
“It’s not hard to fall for a fraudster when you’re looking to get your taxes done on the cheap,” says Chase Insogna, CPA and founder of Austin-based Insogna CPA. “Fraudsters say they are registered tax preparers, but the common person may not know the signs to look for.”
The Warning Signs
Here is a list of warning signs to help you spot a fraudster quickly:
- ⚠️ If you do not see a current registration certificate and proof of business license, walk away.
- ⚠️ Tax preparers should provide clear information about how much they will charge and provide a receipt.
- ⚠️ They should also provide you with a required written disclosure and contract.
- ⚠️ A ghost preparer is a person who prepares your taxes and doesn’t sign the form. This is against Nevada law and the IRS. A ghost preparer is likely unregistered and you won’t see them again. If they don’t sign the form, don’t pay.
- ⚠️ Claims they are endorsed by the IRS. The IRS does not endorse tax preparers.
- ⚠️ Doesn’t have a PTIN. Anyone who prepares federal tax returns for a fee is required by the IRS to have an individual Preparer Tax Identification Number (PTIN) and include it on federal returns.
- ⚠️ Paid tax preparers are required to sign your returns. Beware if they sign it “self-prepared” or use a business label.
- ⚠️ Beware of tax preparers who base their fee on a percentage of your refund or claim they can obtain larger refunds than competitors. The fee should be based on the complexity of your return, not your refund.
- ⚠️ Suggests you direct deposit your refund to an outside account
Need a reliable, licensed CPA to handle your taxes?
If you think you’ve been the victim of tax filing fraud, you can file a complaint here. Individuals, sole proprietors, and single-member LLCs can report a tax preparer’s misconduct using Form 14157 and Form 14157-A, which are tax preparer complaint forms.
Reach out to us today and let us safeguard your financial future. Our expertise ensures you stay on the right side of the law and get the most out of your returns. Let’s talk – because your peace of mind is worth it.