Fraud in Income Tax Preparation

Americans will soon start putting together the information for filing their 2009 income tax returns.  Perhaps you’ve started already.  Unfortunately, the requirement to file income tax returns has provided some individuals with an opportunity to defraud unsuspecting victims.  These fraudsters advertise themselves as tax preparers and lure their victims with untrue promises, such as a guarantee that they will obtain large refunds for any taxpayers that use their services.  They appear to keep their promises by preparing fraudulent returns that show that the taxpayers are due a refund when in fact they are not or by overstating the amount of a refund that is due.  They achieve these fraudulent requests for refunds by taking phony deductions, underreporting income and claiming credits that the taxpayers are not entitled to.  Sometimes they even claim credits that do not even exist.

Taxpayers often pay unreasonably high fees to these preparers and do not realize that they have been defrauded until the Internal Revenue Service alerts them that their returns are incorrect.  By that time, the preparer has often disappeared.  The IRS notes that most tax preparers are honest and try to do a good job.  However, the Department of Justice annually prosecutes preparers who are not honest and the IRS offers some tips for selecting a taxpayer at:
http://www.irs.gov/newsroom/article/0,,id=202123,00.html

Remember, regardless of which tax preparer you use, it is ultimately you, and not the preparer, who is responsible for the tax return.  Choose wisely.

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