Wealth & Risk Management Blog

William Byrnes (Texas A&M) tax & compliance articles

Preventing Tax Preparer Fraud: IRS Initiatives and the Loving case

Posted by William Byrnes on March 28, 2014


by Dawna E. Snipes

Why the Increase in Tax Preparer Fraud?

Tax preparer fraud has become more paramount with taxpayers choosing to have their federal tax returns prepared by paid return providers.  When unadvised and vulnerable taxpayers choose unqualified and unscrupulous preparers, they potentially face IRS penalties for filing false returns.

26 U.S.C. §7701(a)(3) defines a tax return preparer as “any person who prepares tax returns for others for compensation.”[1]  The Internal Revenue Service (IRS) has estimated that approximately 60 percent of taxpayers use paid tax preparers to file their taxes.  However, between 2012 and 2013, the IRS successfully obtained permanent injunctions against over 30 preparers operating throughout the country.  Some reasons for the increase in tax preparer fraud are (1) lack of federal regulations, (2) an arduous tax code, and (3) overly-burdened enforcement agencies.

Read the full article at http://www.advisorfyi.com/2014/01/preventing-tax-preparer-fraud-irs-initiatives-and-the-loving-case/

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