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Tax preparer fraud

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zrosarcasm

Junior Member
What is the name of your state? texas
Just a little history... I used a preparer to file my taxes for 2003 & 2004. In 2005 I was audited for these years. The preparer put exemptions on my return that I did not authorize. Since I've been paying the IRS back. The IRS rejected my 2006 return because it had already been filed (by someone else). The IRS sent me a 2006 statement of my account where I found information provided by the mystery filer. I traced back to the tax service I used for 2003 & 2004. The preparer put his social on it. A refund from the mystery filer was applied to my back taxes. I had already communicated to the IRS that I did not file that return, mine was rejected. I'm concerned that when I tell the IRS that I now know who may have been involved that the IRS will back off the credit apply penalties and I will still have to pay all the money back. There are other people I worked with that used that service and are having issues too. What legal recourse do I have and how do I approach the IRS? Can anyone help me with my dilema.
 


abezon

Senior Member
1. File a complaint with the state attorney general & local police for identity theft.

2. File your current return on paper with a long letter stating why the first return was fraudulent & not your fault. Since you know about the first return, benefitting from that refund is a form of tax fraud. The IRS may leave the money on your account, since they have nowhere else to apply it. You've already told them of the fraudulent return, so they will likely figure this all out themselves.

3. Call the Taxpayer Advocate's office to find out if there is a way to place a fraud alert on your SSN so that someone filing a return under your name & SSN is less likely to happen in the future. Also, file as early as possible so that IF the crook tries this again, the fraudulent return rejects instead of yours.

4. Call the credit bureaus tomorrow morning & place a fraud alert on your credit history. Chances are it's already damaged, but you might head off some problems.

5. Did the return you signed have the extra dependents on it, or did the preparer change the return after you signed & efile it? Why didn't you notice when you got a way bigger refund 2 years in a row? Depending on circumstances, you might have a good argument for the IRS to waive the penalties under "general principles of equity." See a (reputable) tax pro for help phrasing this request.

6. If the IRS is insufficiently helpful, get your Congressional representative or Senator involved. This is why your elected officials have local offices & staff. To help you. It also gets your case escalated to a higher level IRS agent who will have more discretion over what happens.

7. Check your social security earnings carefully. There may be illegals working under your SSN. This is good if they pay in too much & you get their refund; bad if you end up paying taxes for them.

8. Adjust your withholding to aim for a $0 refund for 2007. This should increase your current paychecks. Send the extra $$ to the IRS every paycheck as a payment on your back taxes. This way the IRS gets the same amount of money, but your old debt gets paid off faster & your interest is lower. You are also credited with having a good payment history. If you just build up a large refund throughout 2007 & wait for the IRS to take it, you are also building up interest charges. Plus, the IRS will be hounding you for $$ now.
 

Shay-Pari'e

Senior Member
What is the name of your state? texas
Just a little history... I used a preparer to file my taxes for 2003 & 2004. In 2005 I was audited for these years. The preparer put exemptions on my return that I did not authorize.
Yet you signed .

Since I've been paying the IRS back. The IRS rejected my 2006 return because it had already been filed (by someone else). Like who? Who would have your W-2's for 2006??
The IRS sent me a 2006 statement of my account where I found information provided by the mystery filer. I traced back to the tax service I used for 2003 & 2004. The preparer put his social on it. A refund from the mystery filer was applied to my back taxes. I had already communicated to the IRS that I did not file that return, mine was rejected. I'm concerned that when I tell the IRS that I now know who may have been involved that the IRS will back off the credit apply penalties and I will still have to pay all the money back. There are other people I worked with that used that service and are having issues too. What legal recourse do I have and how do I approach the IRS? Can anyone help me with my dilema.[
 

LdiJ

Senior Member
Well...there is one good thing in this whole mess. Since the mystery filer didn't get the refund its less likely that they will attempt to use your SSN again.

Also Shay, its quite possible that OP did not sign an inaccurate return.

If the OP's tax preparation fees were to come out of his refund, what's quite possible is that the preparer had him sign accurate paperwork, and then added the additional dependents before e-filing the return, and upped the fees by the amount of the additional refund. Op would have then received the amount of refund he expected, and the preparer would have pocketed the rest.
 

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