Tax Preparation Scams

I've talked a lot about tax fraud and other tax-related scams lately, but it's been for a good reason: tax fraud is currently one of the leading forms of identity theft, and it's only going to become more popular with thieves and scammers in the years to come.  Unfortunately, tax fraud doesn't just come from anonymous thieves who managed to get ahold of your information; sometimes it's perpetrated by the very people that you trust to help you get the most out of your return.

It's estimated that around 60% of taxpayers will use a tax preparer to help them file their tax returns this year.  While many of these tax preparers are professionals who want to help their customers get the most out of their returns, a few are actually running elaborate scams to steal money and vital information from those who come to them for help.

There have been a number of news reports about it lately,  from all around the country.  In some cases it's fairly mild, with the shady tax preparers simply skimming a bit of money off of their customers' refunds through the use of hidden fees and other inflated charges.

But some tax preparers don't stop at simply overcharging their customers.

Christopher Tyrone Lee of Anderson, South Carolina was arrested recently for falsifying the tax returns of those who came to him to get their taxes prepared.  Lee created over $123,000 in false deductions and business losses on customer returns as a way of guaranteeing that his customers got a larger tax refund.  He's now facing up to 85 years in prison on a total of 17 charges relating to tax evasion and preparing false returns.  At least Lee was actually preparing the returns for his clients, however; some scammers don't even do that.

Silvia Jones of Murray, Kentucky is currently sought by the police in connection to her "Fo Sho Dough Tax" tax preparation service.  It seems that Jones was making a few unauthorized changes to the returns of some of her customers, falsifying information by exaggerating deductions and adding fake dependents while supplying the bank account information of her business instead of the person whose name was listed on the return.  By the time this was discovered, however, Jones had apparently left town.

 In the end,  stories like these just prove that you need to be careful who you trust with your information. 

 While you think you might be able to save money by going with a cut-rate tax preparer, if you become the victim of fraud then your apparent savings won't be worth it.  Make sure that you choose a tax preparer with a good reputation and who is willing to share his or her Preparer Tax Identification Number.  The majority of tax preparers just want to do their job and help you get an accurate refund, and one that you deserve, but it's worth the time that it will take to protect yourself from those who don't.