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How much do you trust your tax preparer?

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Posted by Mike C Posted on Sept 22 2011

Detroit tax preparer accused of falsifying client income to maximize Earned Income Tax Credits

The United States has sued Crystal Ireland and her business, Master Mind Preparation, to bar them from preparing tax returns for others. According to the complaint, Ireland fabricated businesses and reported fake business income on her customers returns to obtain larger credit amounts.

The complaint alleges that the Internal Revenue Service (IRS) previously penalized Ireland for failing to comply with the due-diligence requirements, yet a follow-up investigation revealed continuing failures and fraudulent claims. The complaint also alleges that, of the returns prepared by Ireland and claiming the EITC for tax years 2007 through 2009 that the IRS examined, the IRS reduced or disallowed the EITC claim on 93 percent of those returns.

I found this article on www.accountingweb.com regarding a Detroit tax preparer was caught preparing false income tax returns. It made me wonder how many other tax preparers out there are doing the same thing for their clients. I assume the IRS plans to reduce the number of untrustworthy tax preparers with the new IRS Registered Tax Return Preparer competency exam. Every California Tax Preparer who is paid to prepare Form 1040 series tax returns are required to take and pass this test, unless practicing as a CPA, Attorney or Enrolled Agent.

It is more important today to work with a trusted CPA in order to protect yourself from being taken advantaged of by a dishonest tax preparer who is only looking out for their own bottom line and not yours.