My tax preparer commited tax fraud. IRS does not believe me. What can I do?

Question

My tax preparer commited tax fraud. IRS does not believe me. What can I do?

Answer 1

If you owe taxes, regardless of the actions of the tax preparer, you will be held responsible for your taxes.  Even fraudulent behavior on the part of the preparer does not absolve you of the responsibility to pay your taxes.

You would need to be more specific about the actions of your tax preparer to get suggestions on what you can do about it.

Answer 2

You'd have to explain just what was done by the preparer, to get an answer.  Could you add some more detail?

But YOU are responsible for the accuracy of your return.  So if there was something on your return that was fraudulent, it really doesn't matter whether the preparer put it there themselves or you directed them to - you signed that it was correct, and YOU are the one responsible for the extra tax plus any penalties and interest.  A reputable preparer will pay the penalties and interest if it was their fault, but as far as the IRS is concerned, the bill is yours.  And of course the initial tax amount is yours in either case, since you'd have owed that in the first place if it had been filed correctly.

Answer 3

More detail would help. What kind of fraud? Did you review your returns? Has your preparer seen the IRS info and had a chance to respond?

Bottom line is that if the returns were prepared incorrectly and you owe taxes, you have to pay them. If you are not sure, get a 2nd opinion.

Fraud is hard to prove. If they are licensed, you could always report them to the board. They have an interest in insuring that their members are following the law.

Answer 4

Why do you say your preparer filed tax fraud?  What did he do?  

Did he not file your tax return with the information you provided him/her?  Did they add more incoome?

Please be more specific.

Thank you.

Answer 5

Hire a really good tax attorney.

Answer 6

What is the IRS questioning?

If your preparer promised you a huge refund and then modified your tax return to get the refund, you should have questioned anything you didn't recognize.

The IRS will not believe you if you are pleading ignorance to "nephews" who aren't related to you, itemized deductions you don't have receipts for, credits you've never heard, income you never had etc.  

Before you signed the return you should have read it carefully.  Even after you left the preparers office, you had the opportunity to amend it.

Answer 7

At this point terminology is very important.  If the IRS is indeed accusing you of fraud, you need an attorney ASAP.  Fraud is a criminal offense for which you can be imprisoned.

If you are simply being charged with an underpayment of taxes, that is something different.  While interest or penalties can be charged, there would be no jail time or criminal charges involved.   In that case you should hire a CPA or EA to evaluate your return and advise you on what to do.