Return Preparer Fraud


Tax form with tax preparer signature, and reminder to have your tax preparer sign your tax forms Even if you hire a tax return preparer who you believe is professional and honest, return preparer fraud or misconduct is something that can happen to anyone. For example, a preparer might change your tax return after you’ve approved and signed it, altering income or credits to obtain a bigger refund and then keeping some or all of it.

In some cases, the preparer might steal your whole refund by changing direct deposit information. Another common fraud situation is when the preparer files a return without your authorization – he or she might have your information from a prior year, and then used that information to file a return for the current year. Or perhaps you met with a preparer and then chose not to hire that person, but the preparer filed a return using your information anyway.

To avoid problems:

  • Be careful when choosing your preparer
  • Know what steps to take to protect yourself
  • Know what to do if you’re the victim of return preparer fraud or misconduct

Be Careful When Selecting a Tax Preparer

This means finding someone with an established business and a good reputation, and knowing certain warning signs

Protecting Yourself

Don’t authorize the preparer to file your return until you’ve reviewed it and made sure all your information is correct. This means deductions, credits, personal details, and any direct deposit information. (You can authorize a return by signing the actual return or IRS Form 8879 authorizing the preparer to use your PIN to submit your tax return electronically.)

Never sign a blank tax form – sign only after all information has been entered and you’ve confirmed it is correct.

Never have your refund (or any portion of your refund) direct-deposited into an account under the preparer’s control. Although you can split your refund among up to three different accounts, a preparer is not authorized to have your refund deposited into an account under his or her control. (See IRS Form 8888, Allocation of Refund (Including Savings Bond Purchases)

Always get a complete copy of your return for your records. Verify it includes the preparer’s name, signature, and preparer tax identification number. Paid return preparers must have a preparer tax identification number issued by the IRS. They must enter that number, along with their name and signature, on every return they prepare in exchange for payment, and must give you a copy of the return. 

If you are a victim of Return Preparer Fraud or Misconduct

The first indication you’ve been victimized by an unscrupulous preparer might be correspondence from the IRS. For example, an IRS notice may alert you there was a mistake on your return or that it’s being audited. Another way you might find out is if a transcript of your account doesn’t match the return you signed.

No matter how you find out you’re the victim of preparer fraud or misconduct, you need to take the following steps:

  1. Contact your local police department and file a report naming the preparer as a suspect.
  2. Fill out IRS Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit. This form will outline the other documents you need to submit to the IRS, which include:
  • IRS Form 14157, Complaint: Tax Return Preparer
  • A copy of the return provided to you by the preparer
  • A signed copy of the return as you intended it to be filed
  • Proof of the refund amount (if applicable)
    • If your refund was direct deposited, a copy of your bank statement showing the deposit amount
    • If your refund was mailed, a  copy of the paper refund check
  • Copies of any other documents you received from the preparer
  • Additional information about the preparer, such as a copy of a business card, promotional flyer, or local business listing 
  • Copies of any other documents that support your claim, such as:
    • a signed and dated statement providing an in-depth explanation of the misconduct
    • A copy of the police report

The form has a long list of requested documents. If you don’t have all of them available, file your complaint with the information that you do have. In some cases, the IRS will consider the claim even without one or two requested document

Make sure you maintain copies of everything for your records.

If you are the victim of return preparer fraud or misconduct, you will need to prove it to the IRS. If the IRS rejects your claim, you may face additional issues, including liability arising from the fraud or misconduct.

If you cannot prove the dishonest preparer changed your return after you signed it, the IRS will assume the altered return the preparer filed is correct, and will hold you accountable. This means you will be responsible for paying back any incorrect refunds the IRS issued, regardless of whether the money went to you or the dishonest preparer.

Following the steps in the “What Should I Do?” section will help you prove your case, especially providing the IRS with the signed copy of the return your preparer gave you, showing your correct bank account number(s) and correct address.

If  you’ve given the IRS the signed copy of the original return, the Taxpayer Advocate Service believes the IRS has sufficient guidance to take corrective actions, including issuing any refund still due to you. If the IRS doesn’t agree with the position, you should contact the Taxpayer Advocate Service and ask for help.

TAS - Choosing a Tax Preparer

IRS Form 14157, Complaint: Tax Return Preparer

IRS Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit (Use this form if your preparer filed or altered your return without your consent and you want to change it.)

IRS.gov - Make a Complaint about a Tax Return Preparer

Have a different tax issue?  Browse common issues and situations at Get Help.

Is your tax problem more complex?  If your issue is causing you financial hardship, you have tried repeatedly and are not receiving a response from the IRS, or you feel your taxpayer rights are being violated, consider contacting TAS.

Do you feel that you need help from a tax professional but can’t afford one? You may be eligible for representation from an attorney, CPA, or enrolled agent associated with a Low Income Taxpayer Clinic.

Last modified January 28, 2015
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