IRS Lists Fraudulent Tax Preparers among 'Dirty Dozen' Scams

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The Internal Revenue Service is warning taxpayers to be on the lookout for unscrupulous tax preparers, citing preparers as one of the most common “Dirty Dozen” tax scams seen during tax season.

The IRS has traditionally compiled a list of 12 of the most common tax scams each tax season, calling the annual list the “Dirty Dozen,” also the title of a 1967 action movie set during World War II. Tax preparers also made the list last year (see IRS Warns of Dirty Dozen Tax Scams of 2014).

This tax season, the IRS has been highlighting the various scams one by one, but has not yet released a complete list for this year. Other “Dirty Dozen” scams highlighted since last week by the IRS include phone scams, phishing scams, identity theft, inflated refund claims and the hiding of money or assets in unreported offshore accounts.

In regard to tax preparers, the IRS acknowledged that the vast majority of tax professionals provide honest high-quality service. But the agency warned that there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers, explaining that's why unscrupulous preparers who prey on unsuspecting taxpayers with outlandish promises of overly large refunds make the Dirty Dozen list every year.

“Filing a tax return can be one of the biggest financial transactions of the year, so taxpayers should choose their tax return preparers carefully,” said IRS commissioner John Koskinen in a statement. “Most tax professionals provide top-notch service, but we see bad actors every year that steal from their clients or compromise returns in ways that can severely harm taxpayers."

The IRS acknowledged that tax return preparers are a vital part of the U.S. tax system, and approximately 60 percent of taxpayers use tax professionals to prepare their returns. However, it also advised taxpayers to make sure their preparer has a Preparer Tax Identification Number, or PTIN; has a professional credential such as CPA, enrolled agent or attorney; belongs to a professional organization; and to check on the preparer's service fees upfront, among other suggestions.

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