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As “Tax Day,” April 15th, approaches, U.S. Attorneys Mike Hurst and Chad Lamar of the Southern and Northern Districts of Mississippi, respectively, remind taxpayers to beware of unscrupulous tax return preparers.
“Every year, some Mississippians are victimized by dishonest individuals looking to make a quick buck by defrauding our tax system. We are committed to bringing these underhanded return preparers to justice. If you suspect tax fraud, contact our offices or your local IRS office. By being vigilant and working together, we can hold these tax fraudsters and cheats accountable,” said U.S. Attorney Hurst.
“I certainly echo the words of my colleague. We, as citizens of the United States, have a legal obligation to timely pay our federal and state taxes and to timely file our tax returns. Those who choose to evade those responsibilities, or take advantage of our citizens who are trying to comply with their legal tax filing obligations, will be met with severe penalties, including prosecution.” said U.S. Attorney Lamar.
While most tax return preparers are professional and honest, some prepare returns with false information in order to improperly boost a taxpayer’s refund, to reduce their liability, or to increase business and preparation fees. Under the law, taxpayers are responsible for what is reported on their returns. When the Internal Revenue Service (“IRS”) uncovers the falsehoods, the taxpayer can face penalties and interest and, if circumstances warrant, criminal prosecution.
The U.S. Attorneys issued the following tips to those who are selecting a tax return preparer:
- Be wary of tax return preparers who claim they can obtain larger refunds than others can.
- Avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of your refund into their financial accounts.
- Ensure you use a preparer with a preparer tax identification number (“PTIN”). Paid tax return preparers must have a PTIN to prepare all or substantially all of a tax return.
- Use a reputable tax professional, who enters their PTIN on your tax return, signs the tax return, and provides you a copy of the return (as required).
- Consider whether the individual or firm will be around for months or years after filing the return to answer questions about the preparation of the tax return.
- Never sign a blank tax form.
- Check the person’s credentials. Only attorneys, CPAs, and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collections, and appeals.
The U.S. Department of Justice applies both civil and criminal tools at its disposal to shut down illegal tax return preparation activity. Taxpayers should always remain wary of tax return preparers who claim they can obtain larger refunds than others or engage in other unscrupulous practices. Every year, the Justice Department’s Tax Division, in collaboration with the U.S. Attorney’s Offices, files civil actions seeking court orders to shut down tax return preparers who allegedly prepared false tax returns, and to punish dishonest tax return preparers for their fraudulent activities. When the evidence supports criminal enforcement action, the U.S. Attorney’s Offices will pursue criminal prosecutions of tax return preparers.
The IRS has some additional information on its website about selecting a return preparer and has launched a free directory of federal tax preparers and a list of tips for choosing a tax preparer.
