Preparing tax returns is not a job many look forward to. Tax laws change frequently - often annually - and you may not have the time or the desire to learn how those laws affect your particular circumstances. For this reason, you may be like many others in Ohio who have someone else prepare your tax returns. Sometimes, this person is a friend or relative, and other times, you may enlist the services of a professional preparer.
While you may relinquish the preparation of your taxes to someone else, this may not relieve you of any consequences or penalties that arise from a poorly or illegally prepared form. Carefully vetting the person you tap to fulfill this important duty is essential if you are to avoid falling prey to scam artists.
The facts about your taxes
There are many reputable and honest tax preparers, and many people rely on their attorneys for this task so they can be confident that the person preparing their taxes is knowledgeable of the laws. However, although trustworthy tax preparers exist, the dishonest ones may offer you a deal that is hard to refuse. This may be your first red flag.
Recognizing a reliable tax preparer often involves looking for those red flags, and this may require setting aside your emotions. While it may be enticing to hear about enormous tax returns, such promises may result in harsh consequences. Here are some of the signs that may indicate your tax preparer is trying to scam you:
- He or she charges a fixed amount that is based on a percentage of the refund the preparer promises to get for you.
- The preparer guarantees a refund without examining your tax information.
- He or she can quote you an exact amount of the refund, typically a considerable sum, based only on your W-2.
- The refund will be possible because the preparer's scheme involves claiming a substantial loss on a business you do not own.
- The preparer suggests other ways to defraud the government into giving you a refund.
When the IRS discovers the fraud or inconsistencies in your return, they are likely to take legal action, which may include severe penalties. Despite the fact that someone else prepared your taxes, federal tax laws require you to take reasonable efforts to ensure that your tax returns are accurate.
Depending on your education and experience with tax matters, the consequences may fall squarely on your shoulders. While the promises and guarantees of a questionable tax preparer may sound sweet to the ear, it may not be worth the risk, especially when you have the option of seeking sound advice from a legal professional.