Beware the Rogue Preparer

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Years ago, I gave up struggling with my tax returns. Too many forms and rules to master. Each year at tax season, I say a silent thanks for my tax preparer. If you are searching for one this tax season, watch out for the many bogus preparers who want your money to do nothing or, worse yet, plan to steal your identity and your tax refund.

Here are just a few of the problems you could encounter:

  • A preparer who’s funneling your personally identifying info to identity thieves
  • One that collects all your documentation and won’t return it
  • Someone who is not on the IRS list of approved providers
  • A preparation website that gets hacked
  • Someone posing as an IRS agent either to collect ‘back taxes’ over the phone or trick you into providing your personal data
  • A tax preparer who promises to get you a bigger refund than others can
  • Phishing emails that appear to be from your tax preparation company


You don’t have to be a Certified Public Accountant to do tax returns, but you should have some training. Sadly, that’s not always the case. Folks in Georgia recently learned that abuse can spread far and wide because identity thieves are quite creative. The U.S. Attorney for the Northern District of Georgia had a case three years ago that outlined some amazing steps a group of scammers took to grab tax details.

“(Bernardo) Davis and his co-conspirators (of Davis Tax Service) used toll-free telephone numbers, websites, flyers, and radio advertisements to advertise the “stimulus payments” and collect victims’ personal information.  They also recruited “runners” who promoted the scheme by word of mouth and collected victims’ personal information,” said United States Attorney Sally Quillian Yates. “In addition to the “stimulus” charade, Davis and his co-conspirators acquired names from a variety of sources, including prisons and homeless shelters, to use in the fraud.”

In all $19 million dollars was believed to be the total this group raked in. This growing crime prompted the IRS in 2012 and 2013 to raise the bar for tax preparers. Background checks and identity numbers are now required. Ask for proof; legitimate preparers won’t object.


Ask these questions:

  • Are you registered with the IRS and what is your Preparer Tax Identity Number (PTIN). Then check the IRS’ If the preparer is not on the list, that’s a red flag.
  • At big box preparers where returns may be filed in batches, ask your particular preparer if they have had a background check. Many big companies require it.
  • How do you secure your files and my records? Do you encrypt your computer files? How do you dispose of used computer equipment?
  • Inquire about others who would have access to the offices including a cleaning crew— anyone who could take photos of your data with a smartphone.
  • Will you charge a flat fee or a percentage of my refund? Flat fees are a better way to ensure an honest versus an inflated return.
  • If there’s an error in my return, what will you do for me?


Give your selected provider copies of your documents. Keep the originals if at all possible. A recent case winding its way through Denver civil court underscored the tax problems created when a preparer doesn’t do the work and won’t return your files. The plaintiff lost all her business tax receipts along with thousands of dollars in ‘progress payments’ made to the preparer. The cost of paying taxes without her legitimate deductions was huge.

If you run into a preparer issue, report it to the IRS immediately on form 14157.

Remember that you are responsible even when the preparer makes a mistake. Be sure to double check the work, ask questions and call out anything you don’t understand. There’s always the option to amend your return at a later date.

By Jeanne Price, editor, The Watchblog







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