Protecting Yourself Against Fraudulent Tax Preparers and the Consequences of Non-Compliance.
The U.S. Department of Justice (DOJ) has been increasing its efforts to combat fraudulent tax preparers who take advantage of unsuspecting taxpayers. The DOJ has been working with the Internal Revenue Service (IRS) to identify and prosecute tax preparers. Who engages in fraudulent activities, such as filing false tax returns, claiming bogus deductions, and stealing clients’ refunds.
One of the key tools used by the DOJ to combat fake tax agent is the injunction. Injunctions are court orders that prevent tax preparers from engaging in specific fake activities or from preparing tax returns altogether. These orders can be temporary or permanent and can be received through civil or criminal proceedings.
In recent years, the DOJ received orders against numerous tax agents across the country who have engaged in fake activities. In 2021, the DOJ received a permanent order against tax agent in Arizona who filed false tax returns for clients. The tax agent was ordered to pay compensation to the affected taxpayers and barred from preparing tax returns in future.
The DOJ has also been working with the IRS to educate taxpayers on how to avoid fraudulent tax preparers. The IRS provides resources and tips for taxpayers to help them identify and choose an honest tax preparer, including checking the preparer’s qualifications, asking for references, and avoiding preparers who promise large refunds or charge a part of the refund as a fee.
Taxpayers who believe they have been the victim of false tax preparation can report the incident to the IRS. The IRS has a dedicated office, the Office of Professional Responsibility, that investigates complaints against tax preparers and takes appropriate action, including revoking their preparer tax identification numbers (PTINs) or referring the matter to the DOJ for criminal prosecution.
Stopping false tax preparers is undoubtedly crucial to protect taxpayers and maintain the integrity of the tax system. However, it’s important to acknowledge that tax laws can be complex, and not all tax preparers possess equal abilities. Therefore, it’s advisable to seek the assistance of experienced tax specialists who can effectively identify all the opportunities and risks that are specific to your situation.
We encourage tax owners to seek out expert tax professionals for help with their taxes. The IfindTaxPro market is a great resource for finding such professionals by posting your project and signing up here. If you’re a licensed tax professional, the market can also provide you with the tools and support you need to connect with clients and provide the best possible service. Register here. So whether you’re a taxpayer or a tax professional, we urge you to take advantage of the resources available to you and make informed decisions about your taxes.