Tax return preparer fraud generally involves the preparation and filing of false income tax returns by preparers who claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients.

This can include fraudulently manipulating income figures to obtain tax credits, such as the Earned Income Tax Credit.

In many situations, the taxpayer may not realize what the tax preparer has done in terms of making false expense claims, deductions, exemptions and credits. However, when the Internal Revenue Service detects a false return, the taxpayer – not the preparer – must pay the additional taxes and interest and could be subject to other penalties.

The IRS Return Preparer Program focuses on enhancing compliance in the tax return preparer community by investigating and referring criminal activity to the U.S. Department of Justice for prosecution.

While most tax preparers provide excellent service to their clients, the IRS urges taxpayers to be careful when choosing a tax preparer. Taxpayers should be as careful as they would be in choosing a doctor or a lawyer.

It is important to know that even if someone else prepares your tax return, the taxpayer is ultimately responsible for all the information on the tax return.

When choosing a tax return preparer watch out for tax preparers who claim they can obtain larger refunds than other preparers; avoid preparers who base their fee on a percentage of the refund; use a reputable tax professional who signs your tax return and provides you with a copy for your records; review your return before you sign it and ask questions on entries you don’t understand; and ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?

Reputable preparers will ask to see your receipts and will ask you multiple questions to determine your qualifications for expenses, deductions and other items. By doing so, they are trying to avoid penalties, interest or additional taxes that could result from an IRS examination.

Also be aware that the courts have issued 175 permanent injunctions against abusive tax scheme promoters and abusive return preparers since in the past four years.

And remember, tax evasion is a risky crime. It’s a felony, punishable by five years imprisonment and a $250,000 fine.

Tax return preparer fraud generally involves the preparation and filing of false income tax returns by preparers who claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients.

This can include fraudulently manipulating income figures to obtain tax credits, such as the Earned Income Tax Credit.

In many situations, the taxpayer may not realize what the tax preparer has done in terms of making false expense claims, deductions, exemptions and credits. However, when the Internal Revenue Service detects a false return, the taxpayer – not the preparer – must pay the additional taxes and interest and could be subject to other penalties.

The IRS Return Preparer Program focuses on enhancing compliance in the tax return preparer community by investigating and referring criminal activity to the U.S. Department of Justice for prosecution.

While most tax preparers provide excellent service to their clients, the IRS urges taxpayers to be careful when choosing a tax preparer. Taxpayers should be as careful as they would be in choosing a doctor or a lawyer.

It is important to know that even if someone else prepares your tax return, the taxpayer is ultimately responsible for all the information on the tax return.

When choosing a tax return preparer watch out for tax preparers who claim they can obtain larger refunds than other preparers; avoid preparers who base their fee on a percentage of the refund; use a reputable tax professional who signs your tax return and provides you with a copy for your records; review your return before you sign it and ask questions on entries you don’t understand; and ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?

Reputable preparers will ask to see your receipts and will ask you multiple questions to determine your qualifications for expenses, deductions and other items. By doing so, they are trying to avoid penalties, interest or additional taxes that could result from an IRS examination.

Also be aware that the courts have issued 175 permanent injunctions against abusive tax scheme promoters and abusive return preparers since in the past four years.

And remember, tax evasion is a risky crime. It’s a felony, punishable by five years imprisonment and a $250,000 fine.