Tax Season and Tax Fraud—How to Avoid Fraudulent Tax Preparers

tax preparer fraudTax season inevitably evokes a fresh set of scams and schemes aimed at your personal financial information—or your refund.


Many individuals and corporations use tax professionals to prepare or assist with their tax and regulatory filings. This makes sense to ensure returns are correctly filed and taxpayers take advantage of opportunities to reduce their tax liability. For high-asset individuals or corporations with a complicated tax scenario, a trusted accounting firm or tax professional can be essential.


This year the Internal Revenue Service (IRS) is again urging taxpayers to be careful of tax preparer fraud when they retain a tax professional. Importantly, the agency is passing along security advice to tax professionals as new email hacks make the rounds. Consider the following points:

  • “New client” phishing email: The IRS is warning legitimate accounting enterprises about “new client” hackers working to breach their business network to exfiltrate client information. Typically, a hacker will email a tax preparer asking about tax preparation services. In the email, or a successive email, the hacker will eventually include a malicious link. When the tax preparer clicks on the link, they unwittingly download malware into their business network. The information lifted from the malicious download is sold for identity theft and to those who prepare false tax returns and steal refunds before a taxpayer is aware.
  • Know before you sign: Whether you use a trusted tax preparer or accounting firm, there are always a few smart tips to keep in mind. Be sure to review your return before it is filed to ensure you understand the deductions and credits taken on your behalf. Do not sign a blank tax return before it is prepared and be sure that your tax preparer signs the return and uses a Preparer Tax Identification Number (PTIN). A PTIN is required for anyone preparing a tax return or assisting someone else prepare and file their return. Be sure to obtain a copy of your return and all schedules.
  • On the refund: Do not authorize your tax preparer to receive your refund in a bank account not controlled by you. Preparers may suggest they remove their fee from your refund and forward the rest to your account—which is not in your best interests.


Notes IRS Chief Jim Lee, “Tax crimes surge during filing season because criminals steal unknowing taxpayers’ information, hack into the servers of CPA firms and tax preparation services and victimize unsuspecting taxpayers with the false promise of huge tax refunds.”


When filing taxes and pretty much everywhere else—buyer beware.


Trusted legal representation if you face allegations of tax fraud or other criminal tax charges

if you are challenged by a tax controversy in Cleveland, Chicago, or elsewhere, the tax attorneys at Robert J. Fedor, Esq., LLC can help. We deliver experienced criminal tax defense. Call us at 800-579-0997 or contact us online.


Understanding Tax Fraud