BusinessBrief.com » Feds warn about shifty tax preparers

Feds warn about shifty tax preparers

January 19, 2010 by Jim Giuliano
Posted in: In this week's e-newsletter, Legal & Compliance


The tax season is here. And so are underhanded tax preparers. The Internal Revenue Service has issued warnings about them, and listed four danger signs and case studies about preparers who got themselves and their business clients in legal trouble.

If you’re looking for a tax preparer, IRS cautions to look for red flags. Be wary if the prospective preparer:

  • Promises to get you a bigger refund than another preparer. A blanket promise of a bigger refund is a dead giveaway that’s something’s not right.
  • Uses a fee schedule that’s based on a percentage of the amount of a refund. Honest preparers won’t base fees on refunds.
  • Promises to represent you in any dealing with the IRS, even though the preparer isn’t a tax attorney, a CPA or an otherwise enrolled agent. Tax preparers are authorized to represent you only in matters relating to forms they’ve actually prepared.
  • Has no affiliation with recognized professional groups. Most legitimate tax preparers are members of professional organizations that provide continuing education and update on the tax laws, as well as having a code of ethics.

The IRS has also listed sample case studies involving prosecution of underhanded preparers and their clients.

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