In this episode of “Protecting Your Money,” host Randy Hutchinson, president and CEO of the Better Business Bureau of the Mid-South, advises consumers to exercise caution when selecting a tax preparer.
Hutchinson reports that dishonest tax preparers, including some operating in the local area, have been sentenced to prison for filing fraudulent returns on behalf of their clients and for themselves. In recent cases, three tax preparers received lengthy federal prison sentences after submitting false returns. Their clients later faced IRS audits and were required to repay thousands of dollars tied to improper refunds for fraudulent deductions.
He also warns taxpayers to be cautious of so-called “ghost preparers.” These individuals may refuse to sign a tax return or fail to include their IRS preparer tax identification number, which is required by law. Additional warning signs include preparers who demand cash-only payments, charge fees based on a percentage of the refund, fabricate false income to claim extra tax credits, or create fake deductions to inflate refund amounts.
Hutchinson advises consumers to thoroughly research tax preparers before sharing any sensitive financial information. The Better Business Bureau (BBB) maintains a list of accredited tax preparers and can help consumers check a preparer’s track record. He also emphasizes that, regardless of who prepares the tax return, individuals are ultimately responsible for the accuracy of what is filed.