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Protect Your Finances: Preventing Tax Preparer Fraud

Tax Preparer Fraud Prevention and Reporting: Protecting Yourself and Your Finances

Tax season can be a stressful time for many people, and it’s essential to put your trust in a tax preparer who follows the law. Unfortunately, not all tax preparers have ethical practices or honest intentions, which can result in a lot of trouble for taxpayers.

It can present challenges beyond the typical stress of filing taxes. It exposes you to potential financial loss and the need to dedicate time and energy to resolve the fraud.

To protect yourself, it is important to know how to identify tax preparer fraud and how to report it if necessary.

Choosing a Reputable Tax Preparer

One of the most effective ways to avoid tax preparer fraud is to select a trustworthy tax professional. This is where doing some groundwork will be helpful.

Simply picking someone from the phone book or the first online ad you see will not suffice. Even though it may seem time-consuming, take some extra time to research your tax preparer carefully.

Begin by looking for a tax professional with a good reputation. It’s always a plus if they’ve been in the tax preparation business for a long time with a proven track record or are part of a well-known tax preparation franchise.

Verifying the Preparer’s Credentials

All tax return professionals must have a Preparer Taxpayer Identification Number(PTIN). The PTIN indicates that the tax preparer holds the requisite proficiency and has complied with the requirements of the IRS.

Ask your potential tax preparer for their PTIN number. You can use the IRS’s Directory of Federal Tax Return Preparers or PTIN to verify that they are authorized tax preparers with the necessary qualifications to prepare tax returns.

Recognizing Red Flags

Always be aware of red flags. Be watchful of tax preparers that guarantee you significant refunds or recommend any tax-saving methods that are shady or against the IRS guidelines.

You should be skeptical of fee structures based on the size of your refund. This puts the tax preparer’s objectives at odds with those of the client.

If a preparer suggests that you endorse the return before it is completed, or sign a blank or incomplete form, it’s best to steer clear of them.

Reviewing and Obtaining a Copy of the Return

Once the return is complete, review your tax return carefully. Double-check all numbers and calculations and make sure everything seems correct to you.

You should request a copy of the completed return from your tax preparer and save a copy of the return. The return will come in handy if you end up filing a complaint or have to file a corrected return.

How to Report Tax Preparer Fraud

If you believe that your tax preparer has committed fraud, the best course of action is to report it immediately. You have several options available for reporting tax preparer fraud.

Reporting to the Police

If you suspect fraud has occurred, you can report it to the police. A police report is valuable supporting documentation for the IRS and is useful when you file additional complaints.

Filling out IRS Form 14157-A

You can file a complaint, disclose preparer misconduct, or report tax fraud or abuse and complete the IRS Form 14157-A online. This form is for incorrect misconduct rather than errors.

You will want the details of everything that happened in connection with the action and any supporting documentation.

Completing IRS Form 14157

The IRS requires taxpayers to file a formal complaint on Form 14157 if they suspect fraud by their tax return preparer. Submitting this form will allow the IRS to investigate the allegations in the complaint thoroughly.

The form is available on the IRS website and has been created to report fraud, disclosure of prohibited practice by practitioners, and erroneous misconduct.

Collecting Proof of Fraud

Apart from completing the required forms, you will also need documents to support your claim that the tax preparer committed fraud. Documents you may want to provide include a police report, relevant letters or emails, applicable refund amounts, copies of documents, and any other pertinent information.

A signed and dated statement from the taxpayer, or ideally, a sworn and notarized affidavit from a third-party individual with knowledge of the specific case, can be great evidence.

Sending All Forms and Documents to the IRS

Compile all the necessary forms and evidence and send them to the IRS Fraud or actual Compliance Division for the taxpayer’s area. You can submit your paperwork by mail, email, or fax.


In conclusion, tax fraud is a severe issue, and learning how to protect yourself is essential. It is crucial to work with a trustworthy tax preparer, verify their credentials, notice red flags, review and obtain a copy of your tax return, and always follow up on your tax refund status.

If you suspect tax preparer fraud, file a complaint with the appropriate authorities and supply all necessary documentation. With these tips, you can save yourself time, money, and stress whenever tax season comes around.

In summary, tax preparer fraud can have devastating consequences on taxpayers. It’s crucial to choose a trustworthy and reputable tax professional and double-check everything before submitting a return.

If you suspect fraud, notify the police, fill out the required IRS forms, collect relevant documents, and send all evidence to the IRS. Protecting yourself from tax preparer fraud requires diligence and an understanding of the reporting process.

This article has equipped you with the necessary tools to do so, ensuring that your finances remain secure and stress-free during tax season.

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