How do tax preparers get into trouble with the IRS?
In 2018 the Office of Professional Responsibility, under the Internal Revenue Service, investigated over 2,600 cases of tax preparer misconduct. According to the Office’s latest report, the three most common problems were:
- Claiming false credentials on Form 2848 (Power of Attorney) or using that power improperly.
- Promising clients they can settle their tax debt for pennies on the dollar.
- Repeatedly violating the due diligence rules on claims for refundable tax credits like earned income credit, American Opportunity credit and other tax breaks.
Steer clear of tax preparers who engage in these practices. Remember that it is you, not them, who are responsible for the taxes, penalties and interest triggered by these illegal practices. (I am pleased say that I do not know any tax preparers who were involved in these investigations or practices).