Tax return preparers have been a pointed target of IRS in recent years, both from a civil preparer penalty perspective as well as a criminal investigative perspective. Tax return scams prey on three factors in the human mind. Some people are scared stiff by the IRS and just want someone to handle their taxes because they’re afraid of getting it wrong. Others are seeking the highest return possible so they can have more money. And most people are ignorant of the finer details of tax law and trust their preparers know what they’re doing. Fraudulent tax return preparers take advantage of all these groups for their own purposes.
Most tax preparers want to do well by their clients, but the IRS has been cracking down much harder than they have in the past. Sometimes an innocent tax preparer gets swept up into an investigation and they may not know how to prove to the IRS that they aren’t submitting fraudulent tax returns or giving bad advice. Often what happens is that an audit of the tax preparation business is done, and then a couple of years later, a criminal investigation is launched.
The IRS wants accurate returns. People are legally responsible for their returns even if they are prepared by a third party. If it can be proven that you’re screwing up tax returns, knowingly or unknowingly, the consequences can be devastating for your business.
Tax return preparers who don’t follow the letter of the law and rules have great exposure to the assessment of huge penalties and criminal prosecution.
That’s why retaining the services of a tax attorney can help your tax preparation business stay out of trouble. At Zuckerman Law, L.L.C., we’ve been on both sides of the fight. In our over thirty years of representation, we have helped tax preparation offices fend off accusations of improper or fraudulent filings. We have also fought hard against tax preparers that do try to scam people. We’ve seen the tricks that are pulled, and they are nasty and prolific.
Operating a tax preparation business without a PTIN.
Charging service fees upfront or getting paid based on a percentage of the refund.
Depositing refunds into the returner’s account rather than the client’s account.
Not offering to use e-File.
Using improper or incomplete documentation to file a return (e.g. using December’s paystub rather than a W2.)
Failure to sign returns and provide a PTIN.
If you’re an honest preparer, not following these practices may seem like business suicide. It is. Many scammers only operate during tax time and suddenly disappear before the questions come from the IRS.
If you are a tax preparation attorney in North Miami Beach, or elsewhere in South Florida, and you believe the government is preparing an audit or criminal investigation of your tax preparation business, call Zuckerman Law, L.L.C., immediately for a consultation. Your business and your freedom could be at stake.
Zuckerman Law, L.L.C.
Phone: (954) 280-8292