When you decide to have someone else do it for you, it's critical to make sure they're licensed with the state, and registered with the Internal Revenue Service .
Unlicensed, rogue preparers often set up shop during tax season and approach people through churches and other community groups, or rely on word-of-mouth referrals through friends. Every year, IRS investigations uncover evidence that fraudulent preparers have doctored tax forms -- and the taxpayers involved have no clue.
IRS Criminal Investigator Kenneth Hines shares one of the common tricks.
"You'll go in and sit down with the tax preparer, they will walk you through your return, they'll tell you what you're going to be getting. And they say, this is your return, say 15-hundred dollars. You leave, they alter all the numbers on the return," explained Hines.
The so-called preparer changes the information you provided, and comes up with different numbers for credits, deductions, even income- so that the math produces a different refund amount. Instead of the $1,500 they said you have coming- they make the refund $5,000. But you're none the wiser.
"You get that $1,500, so when you get your refund check or it's deposited in your bank account, you feel safe, that everything was done properly. The other $3,500 is directed to an account controlled by them," Hines continued.
If you don't review and save copies of the documents that were filed in your name, the fraud could go undetected until IRS agents detect a red flag and call you in for an audit.
Investigators say some fraudulent preparers will go back and amend your return long after the filing season so you never suspect a thing.
If you're concerned or just want to be certain, contact the IRS and request records on past returns- and double check those numbers. And remember, if you pay anyone to prepare your tax return, they should have a state license and be certified as a tax preparer with the IRS. Think twice and consider the risk, If the preparer is simply a "friend of a friend" who offers to do your taxes at a discount, or for free.
Tips for choosing a tax preparer
To report suspected tax fraud activity